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Institutional effects in a simple model of educational production

Author

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  • Bishop, John H.
  • Wößmann, Ludger

Abstract

This paper presents a model of educational production that tries to make sense of recent evidence on effects of institutional arrangements on student performance. In a simple principal-agent framework, students choose their learning effort to maximize their net benefits, while the government chooses educational spending to maximize its net benefits. In the jointly determined equilibrium, schooling quality is shown to depend on several institutionally determined parameters. The impact on student performance of institutions such as central examinations, centralization versus school autonomy, teachers’ influence, parental influence, and competition from private schools is analyzed. Furthermore, the model can rationalize why positive resource effects may be lacking in educational production.

Suggested Citation

  • Bishop, John H. & Wößmann, Ludger, 2004. "Institutional effects in a simple model of educational production," Munich Reprints in Economics 20279, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:20279
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    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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