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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)

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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File URL: http://www.fas.nus.edu.sg/ecs/pub/wp/wp0704.pdf
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Bibliographic Info

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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Web page: http://www.fas.nus.edu.sg/ecs/index.html
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Keywords: Education; Private Tutoring; Test Scores; Birth Order; South Korea;

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References

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  1. repec:fth:prinin:366 is not listed on IDEAS
  2. Kang, Changhui, 2007. "Classroom peer effects and academic achievement: Quasi-randomization evidence from South Korea," Journal of Urban Economics, Elsevier, vol. 61(3), pages 458-495, May.
  3. Raquel Fernandez & Richard Rogerson, 1999. "Equity and Resources: An Analysis of Education Finance Systems," NBER Working Papers 7111, National Bureau of Economic Research, Inc.
  4. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
  5. Caroline Hoxby, 2000. "Peer Effects in the Classroom: Learning from Gender and Race Variation," NBER Working Papers 7867, National Bureau of Economic Research, Inc.
  6. Eric A. Hanushek & John F. Kain & Jacob M. Markman & Steven G. Rivkin, 2001. "Does Peer Ability Affect Student Achievement?," NBER Working Papers 8502, National Bureau of Economic Research, Inc.
  7. Weili Ding & Steven F. Lehrer, 2006. "Do Peers Affect Student Achievement in China's Secondary Schools?," NBER Working Papers 12305, National Bureau of Economic Research, Inc.
  8. Eric A. Hanushek & Ludger Woessmann, 2005. "Does Educational Tracking Affect Performance and Inequality? Differences-in-Differences Evidence across Countries," NBER Working Papers 11124, National Bureau of Economic Research, Inc.
  9. Gibbons, Steve & Machin, Stephen, 2003. "Valuing English primary schools," Journal of Urban Economics, Elsevier, vol. 53(2), pages 197-219, March.
  10. Costas Meghir & Mårten Palme, 2005. "Educational Reform, Ability, and Family Background," American Economic Review, American Economic Association, vol. 95(1), pages 414-424, March.
  11. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation Of Elementary Education," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 577-599, May.
  12. Dennis Epple & Elizabeth Newlon & Richard Romano, 2000. "Ability Tracking, School Competition, and the Distribution of Educational Benefits," NBER Working Papers 7854, National Bureau of Economic Research, Inc.
  13. Edward P. Lazear, 1999. "Educational Production," NBER Working Papers 7349, National Bureau of Economic Research, Inc.
  14. Fernández, Raquel & Galí, Jordi, 1997. "To Each According To...? Markets, Tournaments, and the Matching Problem with Borrowing Constraints," CEPR Discussion Papers 1627, C.E.P.R. Discussion Papers.
  15. Christian Dustmann, 2004. "Parental background, secondary school track choice, and wages," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 209-230, April.
  16. Jung Hur & Kang Changhui, 2007. "School Systems and Efficiency and Equity of Education," Departmental Working Papers wp0701, National University of Singapore, Department of Economics.
  17. Caroline M. Hoxby, 1998. "All School Finance Equalizations Are Not Created Equal," NBER Working Papers 6792, National Bureau of Economic Research, Inc.
  18. Zimmerman, David J, 1992. "Regression toward Mediocrity in Economic Stature," American Economic Review, American Economic Association, vol. 82(3), pages 409-29, June.
  19. Jenkins, Stephen P. & Micklewright, John & Schnepf, Sylke V., 2006. "Social Segregation in Secondary Schools: How Does England Compare with Other Countries?," IZA Discussion Papers 1959, Institute for the Study of Labor (IZA).
  20. 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.
  21. Thomas J. Nechyba, 2000. "Mobility, Targeting, and Private-School Vouchers," American Economic Review, American Economic Association, vol. 90(1), pages 130-146, March.
  22. David Card & Alan B. Krueger, 1996. "School Resources and Student Outcomes: An Overview of the Literature and New Evidence from North and South Carolina," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 31-50, Fall.
  23. Laura M. Argys & Daniel I. Rees & Dominic J. Brewer, 1996. "Detracking America's schools: Equity at zero cost?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 15(4), pages 623-645.
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Cited by:
  1. Bisma Haseeb Khan & Sahar Amjad Shaikh, 2013. "Analyzing the Market for Shadow Education in Pakistan: Does Private Tuition Affect the Learning Gap between Private and Public Schools?," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 18(Special E), pages 129-160, September.
  2. CHOI, Álvaro, 2010. "Analysis Of Private Tutoring Decisions In Korea: A Game Theory Approach," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 10(3).
  3. Gurun, Ayfer & Millimet, Daniel L., 2008. "Does Private Tutoring Payoff?," IZA Discussion Papers 3637, Institute for the Study of Labor (IZA).

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