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School Competition

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  • Jaag, Christian

Abstract

This paper considers the influence of spatial competition on education and its effect on students' school choice and educational achievement by explicitely modeling educational production and the students' participation decision. Education at school is a function of teacher effort and class size. Students decide which school to attend on the basis of an assessment of the associated costs and prospective benefits from doing so. We analyze how competition between schools affects equilibrium resource spending and school diversity as well as the level and distribution of student attainment and welfare. The consideration of spatial aspects of school choice without recourse to vertical differentiation is a unique contribution of this paper. We argue that schools in metropolitan areas with short ways to school and many potential students face fiercer competition which increases school productivity and student performance. This result confirms the findings in Hoxby (2000). Overall learning time in school is constant in the probability that students behave well if students are segregated by type. However, better behaved students have a higher achievement due to higher optimum resource spending. Finally, we support our argument by an empirical analysis of student performance in various matura schools in Switzerland.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 339.

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Date of creation: 2006
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Handle: RePEc:pra:mprapa:339

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Keywords: Schools; Education; Competition;

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References

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  1. Woessmann, Ludger, 2004. "How Equal Are Educational Opportunities? Family Background and Student Achievement in Europe and the United States," IZA Discussion Papers 1284, Institute for the Study of Labor (IZA).
  2. Gianni De Fraja & Pedro Landeras, . "Could Do Better: The Effectiveness of Incentives and Competition in Schools," Discussion Papers 02/11, Department of Economics, University of York.
  3. Economides, Nicholas, 1989. "Symmetric equilibrium existence and optimality in differentiated product markets," Journal of Economic Theory, Elsevier, vol. 47(1), pages 178-194, February.
  4. Edward P. Lazear, 1999. "Educational Production," NBER Working Papers 7349, National Bureau of Economic Research, Inc.
  5. Carnoy, Martin, 1997. "Is Privatization through Education Vouchers Really the Answer? A Comment," World Bank Research Observer, World Bank Group, vol. 12(1), pages 105-16, February.
  6. Pritchett, Lant & Filmer, Deon, 1999. "What education production functions really show: a positive theory of education expenditures," Economics of Education Review, Elsevier, vol. 18(2), pages 223-239, April.
  7. George M. Holmes & Jeff DeSimone & Nicholas G. Rupp, 2003. "Does School Choice Increase School Quality?," NBER Working Papers 9683, National Bureau of Economic Research, Inc.
  8. 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.
  9. Derek Neal, 2002. "How Vouchers Could Change the Market for Education," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 25-44, Fall.
  10. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
  11. Thomas J. Nechyba, 1996. "Public School Finance in a General Equilibrium Tiebout World: Equalization Programs, Peer Effects and Private School Vouchers," NBER Working Papers 5642, National Bureau of Economic Research, Inc.
  12. McMillan, Robert, 2004. "Competition, incentives, and public school productivity," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1871-1892, August.
  13. Elizabeth M. Caucutt, 2002. "Educational Vouchers When There Are Peer Group Effects--Size Matters," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 195-222, February.
  14. Milton Friedman, 1997. "Public Schools: Make Them Private," Education Economics, Taylor & Francis Journals, vol. 5(3), pages 341-344.
  15. John S. Ambler, 1994. "Who benefits from educational choice? some evidence from Europe," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 13(3), pages 454-476.
  16. Hoyt, William H. & Lee, Kangoh, 1998. "Educational vouchers, welfare effects, and voting," Journal of Public Economics, Elsevier, vol. 69(2), pages 211-228, June.
  17. West, Edwin G, 1997. "Education Vouchers in Principle and Practice: A Survey," World Bank Research Observer, World Bank Group, vol. 12(1), pages 83-103, February.
  18. Helen F. Ladd, 2002. "School Vouchers: A Critical View," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 3-24, Fall.
  19. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
  20. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
  21. Figlio, David N., 1999. "Functional form and the estimated effects of school resources," Economics of Education Review, Elsevier, vol. 18(2), pages 241-252, April.
  22. Caroline M. Hoxby, 2000. "Does Competition among Public Schools Benefit Students and Taxpayers?," American Economic Review, American Economic Association, vol. 90(5), pages 1209-1238, December.
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Cited by:
  1. David Card & Martin Dooley & Abigail Payne, 2010. "School Competition and Efficiency with Publicly Funded Catholic Schools," Department of Economics Working Papers 2010-01, McMaster University.

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