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Scale Economies Can Offset the Benefits of Competition: Evidence from a School Consolidation Reform in a Universal Voucher System

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Author Info

  • de Haan, Monique

    ()
    (University of Oslo)

  • Leuven, Edwin

    ()
    (University of Oslo)

  • Oosterbeek, Hessel

    ()
    (University of Amsterdam)

Abstract

A large school consolidation reform in the Netherlands changed minimum school size rules underlying public funding. The supply of schools decreased by 15 percent, but this varied considerably across municipalities. We find that reducing the number of schools by 10 percent increases pupils' achievement by 3 percent of a standard deviation. A reduction in the supply of schools implies, for a given number of pupils, an increase in average school size. We present evidence that in our context scale economies dominated the effects of choice and competition. This points to an often ignored trade-off between scale and competition.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5528.

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Length: 32 pages
Date of creation: Feb 2011
Date of revision:
Handle: RePEc:iza:izadps:dp5528

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Keywords: school choice; competition; school consolidation; achievement; economies of scale;

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References

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  1. Stephen Gibbons & Stephen Machin & Olmo Silva, 2008. "Choice, Competition, and Pupil Achievement," Journal of the European Economic Association, MIT Press, vol. 6(4), pages 912-947, 06.
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  7. Eric A. Hanushek & John F. Kain & Steven G. Rivkin & Gregory F. Branch, 2005. "Charter School Quality and Parental Decision Making With School Choice," NBER Working Papers 11252, National Bureau of Economic Research, Inc.
  8. Andrews, Matthew & Duncombe, William & Yinger, John, 2002. "Revisiting economies of size in American education: are we any closer to a consensus?," Economics of Education Review, Elsevier, vol. 21(3), pages 245-262, June.
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  10. Scott Imberman, 2008. "Achievement and Behavior in Charter Schools: Drawing a More Complete Picture," Working Papers 2009-01, Department of Economics, University of Houston.
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  12. Jesse Rothstein, 2007. "Does Competition Among Public Schools Benefit Students and Taxpayers? Comment," American Economic Review, American Economic Association, vol. 97(5), pages 2026-2037, December.
  13. Böhlmark, Anders & Lindahl, Mikael, 2008. "Does School Privatization Improve Educational Achievement? Evidence from Sweden's Voucher Reform," IZA Discussion Papers 3691, Institute for the Study of Labor (IZA).
  14. Paul Peterson & William Howell & Patrick J. Wolf & David Campbell, 2003. "School Vouchers. Results from Randomized Experiments," NBER Chapters, in: The Economics of School Choice, pages 107-144 National Bureau of Economic Research, Inc.
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  16. David Card & Martin Dooley & Abigail Payne, 2008. "School Competition and Efficiency with Publicly Funded Catholic Schools," NBER Working Papers 14176, National Bureau of Economic Research, Inc.
  17. Miguel Urquiola, 2005. "Does School Choice Lead to Sorting? Evidence from Tiebout Variation," American Economic Review, American Economic Association, vol. 95(4), pages 1310-1326, September.
  18. Cecilia Elena Rouse, 1998. "Private School Vouchers And Student Achievement: An Evaluation Of The Milwaukee Parental Choice Program," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 553-602, May.
  19. Kuziemko, Ilyana, 2006. "Using shocks to school enrollment to estimate the effect of school size on student achievement," Economics of Education Review, Elsevier, vol. 25(1), pages 63-75, February.
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Cited by:
  1. De Witte, K. & Van Klaveren, C., 2012. "The effect of primary school closures on educational attainments of students," Working Papers 42, Top Institute for Evidence Based Education Research.

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