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Could do better: The effectiveness of incentives and competition in schools

  • De Fraja, Gianni
  • Landeras, Pedro

This paper studies the effects of incentive mechanisms and of the competitive environment on the interaction between schools and students, in a set-up where their effort affects the students' educational attainment. We show that increasing the power of the incentive scheme and the effectiveness of competition may have the counterintuitive effect of lowering the students' attainment. In a simple dynamic set-up, where the reputation of the schools affects recruitment, and we show that increased competition leads to segregation of pupils by ability.

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File URL: http://www.sciencedirect.com/science/article/pii/S0047-2727(05)00072-1
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Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 90 (2006)
Issue (Month): 1-2 (January)
Pages: 189-213

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Handle: RePEc:eee:pubeco:v:90:y:2006:i:1-2:p:189-213
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505578

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  19. Eric A. Hanushek & Steven G. Rivkin, 2003. "Does Public School Competition Affect Teacher Quality?," NBER Chapters, in: The Economics of School Choice, pages 23-48 National Bureau of Economic Research, Inc.
  20. Steve Gibbons & Stephen Machin, 2001. "Valuing Primary Schools," CEE Discussion Papers 0015, Centre for the Economics of Education, LSE.
  21. Bradley, Steve & Taylor, Jim, 2002. "The Effect of the Quasi-market on the Efficiency-Equity Trade-Off in the Secondary School Sector," Bulletin of Economic Research, Wiley Blackwell, vol. 54(3), pages 295-314, July.
  22. Chang-Tai Hsieh & Miguel Urquiola, 2003. "When Schools Compete, How Do They Compete? An Assessment of Chile's Nationwide School Voucher Program," NBER Working Papers 10008, National Bureau of Economic Research, Inc.
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  24. Gordon C. Winston, 1999. "Subsidies, Hierarchy and Peers: The Awkward Economics of Higher Education," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 13-36, Winter.
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  28. Caroline Minter Hoxby, 1994. "Do Private Schools Provide Competition for Public Schools?," NBER Working Papers 4978, National Bureau of Economic Research, Inc.
  29. Bradley, Steve & Johnes, Geraint & Millington, Jim, 2001. "The effect of competition on the efficiency of secondary schools in England," European Journal of Operational Research, Elsevier, vol. 135(3), pages 545-568, December.
  30. Victor Lavy, 2002. "Evaluating the Effect of Teachers' Group Performance Incentives on Pupil Achievement," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1286-1317, December.
  31. De Fraja, Gianni & Iossa, Elisabetta, 2002. "Competition among Universities and the Emergence of the Elite Institution," Bulletin of Economic Research, Wiley Blackwell, vol. 54(3), pages 275-93, July.
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