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An alternative instrument for private school competition

  • Cohen-Zada, D.
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    Empirical studies estimating the effect of private school competition on student outcomes commonly use the share of Catholics in the local population as an instrument for private school competition. I show that this is not a valid instrument since it is endogenous to private school competition and suggest using instead the local share of Catholics in the population in 1890 and its squared term. These instruments are very strong and are also exogenous to both student achievements and private school competition. I further show that using the current Catholic share as an instrument results in seriously flawed estimates of the effect of private school competition on math test scores and on educational attainment, to the extent that significant positive effects of private school competition on these outcome measures do not hold when the historical Catholic share in 1890 is used as an alternative instrument. The historical Catholic share in 1890 can also be applied to estimate the treatment effect of Catholic schools.

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    Article provided by Elsevier in its journal Economics of Education Review.

    Volume (Year): 28 (2009)
    Issue (Month): 1 (February)
    Pages: 29-37

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    Handle: RePEc:eee:ecoedu:v:28:y:2009:i:1:p:29-37
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    1. Caroline Minter Hoxby, 1994. "Do Private Schools Provide Competition for Public Schools?," NBER Working Papers 4978, National Bureau of Economic Research, Inc.
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    7. Cohen-Zada, Danny & Justman, Moshe, 2003. "The political economy of school choice: linking theory and evidence," Journal of Urban Economics, Elsevier, vol. 54(2), pages 277-308, September.
    8. Donald W.K. Andrews & James H. Stock, 2005. "Inference with Weak Instruments," NBER Technical Working Papers 0313, National Bureau of Economic Research, Inc.
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    14. Evans, William N & Schwab, Robert M, 1995. "Finishing High School and Starting College: Do Catholic Schools Make a Difference?," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 941-74, November.
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    16. Neal, Derek, 1997. "The Effects of Catholic Secondary Schooling on Educational Achievement," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 98-123, January.
    17. Thomas Dee, 2005. "The Effects of Catholic Schooling on Civic Participation," International Tax and Public Finance, Springer, vol. 12(5), pages 605-625, September.
    18. Cragg, John G. & Donald, Stephen G., 1993. "Testing Identifiability and Specification in Instrumental Variable Models," Econometric Theory, Cambridge University Press, vol. 9(02), pages 222-240, April.
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