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A Model of Vertically Differenciated Education

Author

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  • Effinger, M.R.
  • Polborn, M.K.

Abstract

We analyse the allocation of students who differ in their ability to two school types when there are peer effects (students learn more the better their classmates) and expected income after school depends also on the average productivity of peers. We derive the allocation under free school choice and decentralized determination of the academic level; we show that, compared to the social optimum, the level is suboptimal and to many students attend the better school type. A social planner can improve on the allocation under free school choice by prescribing a higher academic level.

Suggested Citation

  • Effinger, M.R. & Polborn, M.K., 1997. "A Model of Vertically Differenciated Education," Papers 97.469, Toulouse - GREMAQ.
  • Handle: RePEc:fth:gremaq:97.469
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    References listed on IDEAS

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    1. Laura M. Argys & Daniel I. Rees & Dominic J. Brewer, 1996. "Detracking America's schools: Equity at zero cost?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 15(4), pages 623-645.
    2. Arnott, Richard & Rowse, John, 1987. "Peer group effects and educational attainment," Journal of Public Economics, Elsevier, vol. 32(3), pages 287-305, April.
    3. Betts, Julian R, 1998. "The Impact of Educational Standards on the Level and Distribution of Earnings," American Economic Review, American Economic Association, vol. 88(1), pages 266-275, March.
    4. Henderson, Vernon & Mieszkowski, Peter & Sauvageau, Yvon, 1978. "Peer group effects and educational production functions," Journal of Public Economics, Elsevier, vol. 10(1), pages 97-106, August.
    5. Milgrom, Paul & Roberts, John, 1994. "Comparing Equilibria," American Economic Review, American Economic Association, vol. 84(3), pages 441-459, June.
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    Citations

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    Cited by:

    1. Hendrik Jürges & Wolfram F. Richter & Kerstin Schneider, 2005. "Teacher Quality and Incentives: Theoretical and Empirical Effects of Standards on Teacher Quality," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 61(3), pages 298-298, November.
    2. Uschi Backes-Gellner & Stephan Veen, 2006. "Incentives for Schools, Educational Signals and Labour Market Outcomes," Economics of Education Working Paper Series 0009, University of Zurich, Department of Business Administration (IBW), revised Jun 2006.
    3. Jean-Luc Demeulemeester & Olivier Debande, 2008. "Quality and Variety Competition in Higher Education," Working Papers 08-10, Association Française de Cliométrie (AFC).
    4. Kangoh Lee, 2015. "Higher education expansion, tracking, and student effort," Journal of Economics, Springer, vol. 114(1), pages 1-22, January.
    5. Volker Meier & Gabriela Schütz, 2007. "The Economics of Tracking and Non-Tracking," ifo Working Paper Series 50, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    6. Hendrik Jürges & Kerstin Schneider, 2010. "Central exit examinations increase performance... but take the fun out of mathematics," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(2), pages 497-517, March.
    7. Mayer-Foulkes, David, 2002. "On the dynamics of quality student enrollment at institutions of higher education," Economics of Education Review, Elsevier, vol. 21(5), pages 481-489, October.
    8. Jürges, Hendrik & Schneider, Kerstin & Senkbeil, Martin & Carstensen, Claus H., 2012. "Assessment drives learning: The effect of central exit exams on curricular knowledge and mathematical literacy," Economics of Education Review, Elsevier, vol. 31(1), pages 56-65.
    9. Berardino Cesi & Dimitri Paolini, 2014. "Peer Group and Distance: When Widening University Participation is Better," Manchester School, University of Manchester, vol. 82, pages 110-132, December.
    10. Volker Meier, 2000. "Choosing Between School Systems," CESifo Working Paper Series 389, CESifo Group Munich.

    More about this item

    Keywords

    EDUCATION ; EXTERNALITIES;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • I20 - Health, Education, and Welfare - - Education - - - General

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