More harm than good? Sorting effects in a Compensatory education program

In this paper, we provide evidence that compensatory education policies that target schools in socially deprived areas are likely to create a negative signal resulting in a sorting effect. We investigate this effect by analyzing the French "Réseaux ambition réussite" (RAR) program, which targeted low-achieving and socially disadvantaged junior high schools between 2006 and 2011. We use an original geocoded individual data set and a regression discontinuity identification strategy to assess the causal effect of the RAR program on families’ school choice. We find that individuals do adjust to school-based compensatory education policies, since they tend to avoid schools that enter the RAR program by enrolling in the private sector. We also find that the RAR program increases social segregation across schools, since the most socially advantaged individuals tend to avoid schools that enter the RAR program more than other pupils, by enrolling in the private sector instead.