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Scale Economies Can Offset the Benefits of Competition: Evidence from a School Consolidation Reform in a Universal Voucher System

  • de Haan, Monique

    ()

    (University of Oslo)

  • Leuven, Edwin

    ()

    (University of Oslo)

  • Oosterbeek, Hessel

    ()

    (University of Amsterdam)

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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5528.

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Length: 32 pages
Date of creation: Feb 2011
Date of revision:
Handle: RePEc:iza:izadps:dp5528
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  1. Eric A. Hanushek & John F. Kain & Steven G. Rivkin & Gregory F. Branch, 2005. "Charter School Quality and Parental Decision Making With School Choice," NBER Working Papers 11252, National Bureau of Economic Research, Inc.
  2. David Card & Martin D. Dooley & A. Abigail Payne, 2010. "School Competition and Efficiency with Publicly Funded Catholic Schools," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 150-76, October.
  3. Gibbons, Steve & Machin, Stephen & Silva, Olmo, 2006. "Choice, Competition and Pupil Achievement," IZA Discussion Papers 2214, Institute for the Study of Labor (IZA).
  4. 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.
  5. 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.
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  7. 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.
  8. 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.
  9. Joshua Angrist & Eric Bettinger & Erik Bloom & Elizabeth King & Michael Kremer, 2002. "Vouchers for Private Schooling in Colombia: Evidence from a Randomized Natural Experiment," American Economic Review, American Economic Association, vol. 92(5), pages 1535-1558, December.
  10. 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.
  11. 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.
  12. 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.
  13. 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.
  14. 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.
  15. Helen F. Ladd, 2002. "School Vouchers: A Critical View," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 3-24, Fall.
  16. 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.
  17. 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.
  18. 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).
  19. 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.
  20. 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.
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