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Estimating the Cream Skimming Effect of School Choice

Author Info

  • Joseph G. Altonji
  • Ching-I Huang
  • Christopher R. Taber

Abstract

We develop a framework that may be used to determine the degree to which a school choice program may harm public school stayers by luring the best students to other schools. This framework results in a simple formula showing that the "cream-skimming" effect is increasing in the degree of heterogeneity within schools, the school choice takeup rate of strong students relative to weak students, and the importance of peers. We use the formula to investigate the effects of a voucher program on the high school graduation rate of the students who would remain in public school. We employ NELS:88 data to measure the characteristics of public school students, to estimate a model of the private school entrance decision, and to estimate peer group effects on graduation. We supplement the econometric estimates with a wide range of alternative assumptions about school choice and peer effects. We find that the cream skimming effect is negative but small and that this result is robust across our specifications.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16579.

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Date of creation: Dec 2010
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Publication status: published as Joseph G. Altonji & Ching-I Huang & Christopher R. Taber, 2015. "Estimating the Cream Skimming Effect of School Choice," Journal of Political Economy, University of Chicago Press, vol. 123(2), pages 266 - 324.
Handle: RePEc:nbr:nberwo:16579
Note: CH ED LS PE
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  • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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  1. Dennis N. Epple & Richard Romano, 2003. "Neighborhood Schools, Choice, and the Distribution of Educational Benefits," NBER Chapters, in: The Economics of School Choice, pages 227-286 National Bureau of Economic Research, Inc.
  2. 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.
  3. repec:eme:rlepps:v:18:y:1999:i:1999:p:115-140 is not listed on IDEAS
  4. Thomas J. Nechyba, 2003. "Introducing School Choice into Multidistrict Public School Systems," NBER Chapters, in: The Economics of School Choice, pages 145-194 National Bureau of Economic Research, Inc.
  5. Dennis Epple & Richard Romano, 2002. "Educational Vouchers and Cream Skimming," NBER Working Papers 9354, National Bureau of Economic Research, Inc.
  6. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 151-184, February.
  7. Elizabeth M. Caucutt, 2002. "Educational Vouchers When There Are Peer Group Effects--Size Matters," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 195-222, February.
  8. Lisa Barrow & Cecilia Elena Rouse, 2008. "School vouchers and student achievement: recent evidence, remaining questions," Working Paper Series WP-08-08, Federal Reserve Bank of Chicago.
  9. Helen F. Ladd, 2002. "School Vouchers: A Critical View," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 3-24, Fall.
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Cited by:

  1. Todd R. Stinebrickner & Ralph Stinebrickner, 2007. "The Causal Effect of Studying on Academic Performance," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20072, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
  2. Urquiola, Miguel & Verhoogen, Eric, 2007. "Class Size and Sorting in Market Equilibrium: Theory and Evidence," IZA Discussion Papers 2963, Institute for the Study of Labor (IZA).
  3. Menezes-Filho, Naercio & Moita, Rodrigo & Andrade, Eduardo, 2012. "Entry in School Markets: Theory and Evidence from Brazilian Municipalities," Insper Working Papers wpe_284, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
  4. Ferreyra,Maria Marta & Kosenok,Grigory, 2015. "Charter school entry and school choice: the case of Washington, D.C," Policy Research Working Paper Series 7383, The World Bank.
  5. Maria Marta Ferreyra, 2007. "Estimating the Effects of Private School Vouchers in Multidistrict Economies," American Economic Review, American Economic Association, vol. 97(3), pages 789-817, June.
  6. Dennis N. Epple & Richard Romano, 2012. "On The Political Economy Of Educational Vouchers," NBER Working Papers 17986, National Bureau of Economic Research, Inc.
  7. Farré, Lídia & Ortega, Francesc & Tanaka, Ryuichi, 2015. "Immigration and School Choices in the Midst of the Great Recession," IZA Discussion Papers 9234, Institute for the Study of Labor (IZA).
  8. Michele Battisti, 2013. "High Wage Workers and High Wage Peers," Ifo Working Paper Series Ifo Working Paper No. 168, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
  9. Neilson, Christopher & Zimmerman, Seth D., 2011. "The Effect of School Construction on Test Scores, School Enrollment, and Home Prices," IZA Discussion Papers 6106, Institute for the Study of Labor (IZA).
  10. Facundo Albornoz & Samuel Berlinski & Antonio Cabrales, 2016. "Motivation, Resources and the Organization of the School System," IDB Publications (Working Papers) 94958, Inter-American Development Bank.

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