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Income and Peer Quality Sorting in Public and Private Schools

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  • Nechyba, Thomas J.

Abstract

Any system of primary and secondary schools involves explicit or implicit mechanisms that ration not only financial but also nonfinancial inputs into education production. This chapter focuses primarily on such mechanisms as they relate to the sorting of parents and children into schools and classrooms. Three primary mechanisms are reviewed: (1) sorting that emerges through residential location choices within housing markets that are linked to schools; (2) sorting that arises from parental choices to send children to private rather than public schools; and (3) sorting within schools that results from explicit tracking policies. The equilibrium level of sorting (along parental income and child peer quality dimensions) then depends on both the specifics of how education production works and the overall characteristics of the general equilibrium environment within which schools operate. We review the theoretical as well as the related simulation-based literature in this area and suggest that much potential exists for increasing empirical relevance of the emerging models for policy analysis, particularly as a related empirical literature comes to better terms with the nature of peer effects in education production.

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This chapter was published in:

  • Erik Hanushek & F. Welch (ed.), 2006. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 2, number 2, June.
    This item is provided by Elsevier in its series Handbook of the Economics of Education with number 2-22.

    Handle: RePEc:eee:educhp:2-22

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    Web page: http://www.elsevierdirect.com/product.jsp?isbn=9780444513991

    Related research

    Keywords: sorting; peers; segregation; peer effects; school competition; vouchers;

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    Cited by:
    1. Simon Burgess & Adam Briggs, 2006. "School Assignment, School Choice and Social Mobility," The Centre for Market and Public Organisation 06/157, Department of Economics, University of Bristol, UK.
    2. David de la Croix & Matthias Doepke, 2007. "To Segregate or to Integrate: Education Politics and Democracy," NBER Working Papers 13319, National Bureau of Economic Research, Inc.
    3. Gioia de Melo, 2012. "Peer effects identified through social networks. Evidence from uruguayan schools," Documentos de Trabajo basados en Monografías (students working papers) 12-15, Instituto de Economía - IECON.
    4. Hanushek, Eric & Yilmaz, Kuzey, 2007. "The complementarity of Tiebout and Alonso," Journal of Housing Economics, Elsevier, vol. 16(2), pages 243-261, June.
    5. Panebianco, Fabrizio, 2014. "Socialization networks and the transmission of interethnic attitudes," Journal of Economic Theory, Elsevier, vol. 150(C), pages 583-610.
    6. Yohanes E. Riyanto & Linda A. Toolsema, 2007. "Corporate Social Responsibility in a Corporate Governance Framework," Departmental Working Papers wp0702, National University of Singapore, Department of Economics.

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