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

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  • Changhui Kang

    () (Department of Economics, National University of Singapore)

Abstract

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.

Suggested Citation

  • Changhui Kang, 2007. "Does Money Matter? The Effect of Private Educational Expenditures on Academic Performance," Departmental Working Papers wp0704, National University of Singapore, Department of Economics.
  • Handle: RePEc:nus:nusewp:wp0704
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    File URL: http://www.fas.nus.edu.sg/ecs/pub/wp/wp0704.pdf
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    References listed on IDEAS

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    1. Jacob M. Markman & Eric A. Hanushek & John F. Kain & Steven G. Rivkin, 2003. "Does peer ability affect student achievement?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(5), pages 527-544.
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    Citations

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    Cited by:

    1. Poh Lin Tan & S. Philip Morgan & Emilio Zagheni, 2016. "A Case for “Reverse One-Child” Policies in Japan and South Korea? Examining the Link Between Education Costs and Lowest-Low Fertility," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 35(3), pages 327-350, June.
    2. Hoon Choi & Alvaro Choi, 2015. "When one door closes: the impact of the hagwon curfew on the consumption of private tutoring in the Republic of Korea," Working Papers XREAP2015-06, Xarxa de Referència en Economia Aplicada (XREAP), revised Nov 2015.
    3. Asmaa Elbadawy, 2013. "The Effect of Tutoring on Secondary Streaming in Egypt," Working Papers 769, Economic Research Forum, revised Sep 2013.
    4. ZHAO, Guochang, 2015. "Can money ‘buy’ schooling achievement? Evidence from 19 Chinese cities," China Economic Review, Elsevier, vol. 35(C), pages 83-104.
    5. Mehtabul Azam, 2016. "Private Tutoring: Evidence from India," Review of Development Economics, Wiley Blackwell, vol. 20(4), pages 739-761, November.
    6. Gurun, Ayfer & Millimet, Daniel L., 2008. "Does Private Tutoring Payoff?," IZA Discussion Papers 3637, Institute for the Study of Labor (IZA).
    7. Ilya Prakhov, 2014. "Effects of Investments in Preparation Courses on the USE Scores," Educational Studies, Higher School of Economics, issue 3, pages 74-99.
    8. CHOI, Álvaro, 2010. "Analysis Of Private Tutoring Decisions In Korea: A Game Theory Approach," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 10(3).
    9. Bisma Haseeb Khan & Sahar Amjad Shaikh, 2013. "Analyzing the Market for Shadow Education in Pakistan: Does Private Tuition Affect the Learning Gap between Private and Public Schools?," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 18(Special E), pages 129-160, September.

    More about this item

    Keywords

    Education; Private Tutoring; Test Scores; Birth Order; South Korea;

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

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