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Scale economies can offset the benefits of competition: Evidence from a school consolidation reform in a universal voucher system

Author Info

  • de Haan, Monique
  • Leuven, Edwin
  • Oosterbeek, Hessel

Abstract

A large school consolidation reform in the Netherlands changed minimum school size rules underlying public funding. The supply of schools decreased by 15 percent, but this varied considerably across municipalities. We find that reducing the number of schools by 10 percent increases pupils' achievement by 3 percent of a standard deviation. A reduction in the supply of schools implies, for a given number of pupils, an increase in average school size. We present evidence that in our context scale economies dominated the effects of choice and competition. This points to an often ignored trade-off between scale and competition.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8272.

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Date of creation: Feb 2011
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Handle: RePEc:cpr:ceprdp:8272
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Keywords: Scale economies; School choice; School consolidation; Student achievement;

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Find related papers by JEL classification:
  • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
  • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
  • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
  • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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  1. Joshua Angrist & Eric Bettinger & Michael Kremer, 2006. "Long-Term Educational Consequences of Secondary School Vouchers: Evidence from Administrative Records in Colombia," American Economic Review, American Economic Association, vol. 96(3), pages 847-862, June.
  2. Helen F. Ladd, 2002. "School Vouchers: A Critical View," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 3-24, Fall.
  3. Eric A. Hanushek & John F. Kain & Steven G. Rivkin & Gregory F. Branch, 2005. "Charter School Quality and Parental Decision Making with School Choice," Discussion Papers 04-024, Stanford Institute for Economic Policy Research.
  4. 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.
  5. Card, David & Dooley, Martin & Payne, Abigail, 2010. "School Competition and Efficiency with Publicly Funded Catholic Schools," CLSSRN working papers clsrn_admin-2010-28, Vancouver School of Economics, revised 23 Sep 2010.
  6. David M. Brasington, 2003. "Size and School District Consolidation: Do Opposites Attract?," Economica, London School of Economics and Political Science, vol. 70(280), pages 673-690, November.
  7. Brasington, David M., 1999. "Joint provision of public goods: the consolidation of school districts," Journal of Public Economics, Elsevier, vol. 73(3), pages 373-393, September.
  8. Bettinger, Eric P., 2005. "The effect of charter schools on charter students and public schools," Economics of Education Review, Elsevier, vol. 24(2), pages 133-147, April.
  9. Paul Peterson & William Howell & Patrick J. Wolf & David Campbell, 2003. "School Vouchers. Results from Randomized Experiments," NBER Chapters, in: The Economics of School Choice, pages 107-144 National Bureau of Economic Research, Inc.
  10. Jesse Rothstein, 2007. "Does Competition Among Public Schools Benefit Students and Taxpayers? Comment," American Economic Review, American Economic Association, vol. 97(5), pages 2026-2037, December.
  11. Miguel Urquiola, 2005. "Does School Choice Lead to Sorting? Evidence from Tiebout Variation," American Economic Review, American Economic Association, vol. 95(4), pages 1310-1326, September.
  12. Elizabeth King & Eric Bettinger & Erik Bloom & Joshua Angrist & Michael Kremer, 2002. "Vouchers for private schooling in colombia: Evidence from a randomized natural experiment," Natural Field Experiments 00203, The Field Experiments Website.
  13. Böhlmark, Anders & Lindahl, Mikael, 2008. "Does School Privatization Improve Educational Achievement? Evidence from Sweden's Voucher Reform," IZA Discussion Papers 3691, Institute for the Study of Labor (IZA).
  14. Gibbons, Steve & Machin, Stephen & Silva, Olmo, 2006. "Choice, Competition and Pupil Achievement," IZA Discussion Papers 2214, Institute for the Study of Labor (IZA).
  15. Hsieh, Chang-Tai & Urquiola, Miguel, 2006. "The effects of generalized school choice on achievement and stratification: Evidence from Chile's voucher program," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1477-1503, September.
  16. Julie Berry Cullen & Brian A Jacob & Steven Levitt, 2006. "The Effect of School Choice on Participants: Evidence from Randomized Lotteries," Econometrica, Econometric Society, vol. 74(5), pages 1191-1230, 09.
  17. Andrews, Matthew & Duncombe, William & Yinger, John, 2002. "Revisiting economies of size in American education: are we any closer to a consensus?," Economics of Education Review, Elsevier, vol. 21(3), pages 245-262, June.
  18. Scott A. Imberman, 2011. "Achievement and Behavior in Charter Schools: Drawing a More Complete Picture," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 416-435, May.
  19. Cecilia Elena Rouse, 1998. "Private School Vouchers And Student Achievement: An Evaluation Of The Milwaukee Parental Choice Program," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 553-602, May.
  20. Kuziemko, Ilyana, 2006. "Using shocks to school enrollment to estimate the effect of school size on student achievement," Economics of Education Review, Elsevier, vol. 25(1), pages 63-75, February.
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Cited by:

  1. De Witte, K. & Van Klaveren, C., 2012. "The effect of primary school closures on educational attainments of students," Working Papers 42, Top Institute for Evidence Based Education Research.

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