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The dynamic relationship between school size and academic performance: An investigation of elementary schools in Wisconsin

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  • Welsch, David M.
  • Zimmer, David M.

Abstract

This paper constructs a panel model of school-level performance in which the key explanatory variable is school size. Typical panel models with unobserved effects impose the strict exogeneity assumption, which in this paper, implies a school׳s academic performance cannot impact its future school size. Yet it seems appropriate that, with school-level standardized test scores publicly available and widely reported, school size and school performance should be analyzed dynamically and jointly. We construct a panel model that explicitly allows for “feedback” from academic performance to future school size. We show that, not only is such feedback important, but once it is taken into account, the estimated relationship between school size and academic performance becomes far more negative, relative to models that ignore feedback.

Suggested Citation

  • Welsch, David M. & Zimmer, David M., 2016. "The dynamic relationship between school size and academic performance: An investigation of elementary schools in Wisconsin," Research in Economics, Elsevier, vol. 70(1), pages 158-169.
    • Handle: RePEc:eee:reecon:v:70:y:2016:i:1:p:158-169
    DOI: 10.1016/j.rie.2015.07.006
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    1. Benjamin Artz & David M. Welsch, 2021. "Overeducation and wages revisited: A two‐cohort comparison and random coefficients approach," Southern Economic Journal, John Wiley & Sons, vol. 87(3), pages 909-936, January.

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