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Estimating the Direct and Indirect Effects of Major Education Reforms

Author

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  • Michael Gilraine
  • Hugh Macartney
  • Robert McMillan

Abstract

We propose an approach for credibly estimating indirect sorting effects of major education reforms and placing them alongside the reforms’ direct and persistent effects for the first time. Applying our approach to California’s state-wide class size reduction program, we estimate a large positive direct effect of smaller classes on test scores and an even larger indirect effect due to demographic changes as private school students switch into public schools; both effects also persist. Accounting for sorting using these estimates raises the program’s benefit-cost ratio significantly. Further, our analysis indicates that indirect sorting is likely relevant in policy evaluations more generally.

Suggested Citation

  • Michael Gilraine & Hugh Macartney & Robert McMillan, 2020. "Estimating the Direct and Indirect Effects of Major Education Reforms," Working Papers tecipa-673, University of Toronto, Department of Economics.
    • Handle: RePEc:tor:tecipa:tecipa-673
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    References listed on IDEAS

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    More about this item

    Keywords

    Education Reform; Direct Effects; Indirect Effects; Sorting; Education Production; Class Size Reduction; Persistence; Differencing; Difference-in-Differences;
    All these keywords.

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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