Does Money Matter? The Effect of Private Educational Expenditures on Academic Performance

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Does Money Matter? The Effect of Private Educational Expenditures on Academic Performance

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Changhui Kang () (Department of Economics, National University of Singapore)

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Changhui Kang

Abstract

The causal relationship between educational investments and student outcomes continues to attract attention. The majority of studies have examined the effectiveness of public school expenditures on student outcomes. This paper attempts to shed light on the impacts of educational inputs by examining a private educational investment-private tutoring that is widely employed by South Korean parents as a supplement to public school education. To deal with the endogeneity of private tutoring expenditures, the paper relies on instrumental variables (IV) methods, exploiting a student's birth order as a source of identification. Based on the IV methods, the paper shows that a 10 percent increase in expenditure leads to a 0.56 percentile point improvement in test score. Such an estimated effect is modest and comparable to the effect of public school expenditures on earnings estimated by previous studies.

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Paper provided by National University of Singapore, Department of Economics in its series Departmental Working Papers with number wp0704.

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Length: 43 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:nus:nusewp:wp0704

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Find related papers by JEL classification:
I20 - Health, Education, and Welfare - - Education - - - General
C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

This paper has been announced in the following NEP Reports:

NEP-ALL-2007-08-08 (All new papers)
NEP-EDU-2007-08-08 (Education)
NEP-HRM-2007-08-08 (Human Capital & Human Resource Management)
NEP-SEA-2007-08-08 (South East Asia)
NEP-URE-2007-08-08 (Urban & Real Estate Economics)

References listed on IDEAS
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repec:fth:prinin:366 is not listed on IDEAS
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Other versions:
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Other versions:
- Epple, Dennis & Newlon, Elizabeth & Romano, Richard, 2002. "Ability tracking, school competition, and the distribution of educational benefits," Journal of Public Economics, Elsevier, vol. 83(1), pages 1-48, January. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Gurun, Ayfer & Millimet, Daniel L., 2008. "Does Private Tutoring Payoff?," IZA Discussion Papers 3637, Institute for the Study of Labor (IZA). [Downloadable!]

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