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Incentives, resources and the organization of the school system


  • Cabrales, Antonio
  • Albornoz, Facundo
  • Berlinski, Samuel


We study a model where student effort and talent interact with parental and teachers' investments, as well as with school system resources. The model is rich, yet sufficiently stylized to provide novel implications. We can show, for example, that an improvement in parental outside options will reduce parental and school effort, which are partially compensated through school resources. In this way we provide a rationale for the ambiguous existing empirical evidence on the effect of school resources. We also provide a novel microfoundation for peer effects, with empirical implications on welfare and on preferences for sorting across schools.

Suggested Citation

  • Cabrales, Antonio & Albornoz, Facundo & Berlinski, Samuel, 2011. "Incentives, resources and the organization of the school system," UC3M Working papers. Economics we1103, Universidad Carlos III de Madrid. Departamento de Economía.
  • Handle: RePEc:cte:werepe:we1103

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    References listed on IDEAS

    1. Miguel Urquiola & Eric Verhoogen, 2009. "Class-Size Caps, Sorting, and the Regression-Discontinuity Design," American Economic Review, American Economic Association, vol. 99(1), pages 179-215, March.
    2. Epple, Dennis & Figlio, David & Romano, Richard, 2004. "Competition between private and public schools: testing stratification and pricing predictions," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1215-1245, July.
    3. Edwin Leuven & Hessel Oosterbeek & Marte Rønning, 2008. "Quasi-experimental Estimates of the Effect of Class Size on Achievement in Norway," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(4), pages 663-693, December.
    4. Esther Duflo & Pascaline Dupas & Michael Kremer, 2011. "Peer Effects, Teacher Incentives, and the Impact of Tracking: Evidence from a Randomized Evaluation in Kenya," American Economic Review, American Economic Association, vol. 101(5), pages 1739-1774, August.
    5. Dennis Epple & Richard Romano, 2008. "Educational Vouchers And Cream Skimming," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1395-1435, November.
    6. C. Kirabo Jackson, 2009. "Student Demographics, Teacher Sorting, and Teacher Quality: Evidence from the End of School Desegregation," Journal of Labor Economics, University of Chicago Press, vol. 27(2), pages 213-256, April.
    7. Dennis Epple & Richard Romano & Holger Sieg, 2006. "Admission, Tuition, and Financial Aid Policies in the Market for Higher Education," Econometrica, Econometric Society, vol. 74(4), pages 885-928, July.
    8. Brindusa Anghel & Antonio Cabrales, 2010. "The Determinants of Success in Primary Education in Spain," Working Papers 2010-20, FEDEA.
    9. Sean Corcoran & William N. Evans, 2010. "Income Inequality, the Median Voter, and the Support for Public Education," NBER Working Papers 16097, National Bureau of Economic Research, Inc.
    10. 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.
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    Cited by:

    1. Elizabeth Beasley & Elise Huillery, 2017. "Willing but Unable? Short-term Experimental Evidence on Parent Empowerment and School Quality," World Bank Economic Review, World Bank Group, vol. 31(2), pages 531-552.
    2. Fredriksson, Peter & Öckert, Björn & Oosterbeek, Hessel, 2014. "Inside the Black Box of Class Size: Mechanisms, Behavioral Responses, and Social Background," IZA Discussion Papers 8019, Institute for the Study of Labor (IZA).
    3. Facundo Albornoz & Antonio Cabrales & Esther Hauk, 2011. "Immigration and the School System," Working Papers 590, Barcelona Graduate School of Economics.
    4. Kuehn, Zoe & Landeras, Pedro, 2012. "Study Time and Scholarly Achievement in PISA," Working Papers 2012-02, FEDEA.
    5. Albornoz-Crespo, Facundo & Cabrales, Antonio & Hauk, Esther, 2014. "Which club should I attend, Dad?: Targeted socialization and production," CEPR Discussion Papers 10321, C.E.P.R. Discussion Papers.
    6. Ferreyra, Maria Marta & Liang, Pierre Jinghong, 2012. "Information asymmetry and equilibrium monitoring in education," Journal of Public Economics, Elsevier, vol. 96(1), pages 237-254.
    7. Berlinski, Samuel & Busso, Matias, 2017. "Challenges in educational reform: An experiment on active learning in mathematics," Economics Letters, Elsevier, vol. 156(C), pages 172-175.
    8. Elizabeth Beasley & Elise Huillery, 2013. "School Resources, Behavioral Responses and School Quality: Short-Term Experimental Evidence from Niger," Sciences Po publications info:hdl:2441/7o52iohb7k6, Sciences Po.

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    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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