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Does Money Matter? The Effect of Private Educational Expenditures on Academic Performance

  • Changhui Kang

    ()

    (Department of Economics, National University of Singapore)

The causal relationship between educational investments and student outcomes continues to attract attention. The majority of studies have examined the effectiveness of public school expenditures on student outcomes. This paper attempts to shed light on the impacts of educational inputs by examining a private educational investment-private tutoring that is widely employed by South Korean parents as a supplement to public school education. To deal with the endogeneity of private tutoring expenditures, the paper relies on instrumental variables (IV) methods, exploiting a student's birth order as a source of identification. Based on the IV methods, the paper shows that a 10 percent increase in expenditure leads to a 0.56 percentile point improvement in test score. Such an estimated effect is modest and comparable to the effect of public school expenditures on earnings estimated by previous studies.

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File URL: http://www.fas.nus.edu.sg/ecs/pub/wp/wp0704.pdf
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Paper provided by National University of Singapore, Department of Economics in its series Departmental Working Papers with number wp0704.

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Length: 43 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:nus:nusewp:wp0704
Contact details of provider: Web page: http://www.fas.nus.edu.sg/ecs/index.html

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  12. Stephen P. Jenkins & John Micklewright & Sylke V. Schnepf, 2006. "Social segregation in secondary schools: How does England compare with other countries?," Working Papers 27, ECINEQ, Society for the Study of Economic Inequality.
  13. 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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  15. Sandra E. Black, 1997. "Do better schools matter? Parental valuation of elementary education," Research Paper 9729, Federal Reserve Bank of New York.
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  17. David Card & Alan Krueger, 1996. "School Resources and Student Outcomes: An Overview of the Literature and New Evidence from North and South Carolina," Working Papers 745, Princeton University, Department of Economics, Industrial Relations Section..
  18. Kang, Changhui, 2007. "Classroom peer effects and academic achievement: Quasi-randomization evidence from South Korea," Journal of Urban Economics, Elsevier, vol. 61(3), pages 458-495, May.
  19. Raquel Fernandez & Richard Rogerson, 1999. "Equity and Resources: An Analysis of Education Finance Systems," NBER Working Papers 7111, National Bureau of Economic Research, Inc.
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