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The Treatment Effect of Attending a High-Quality School and the Influence of Unobservables

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  • Ronny Freier
  • Johanna Storck

Abstract

This paper studies the effect of attending a high-quality secondary school on subsequent educational outcomes. The analysis is based on data from the German Socio-Economic Panel Study in which we observe children when they make their secondary school choice (between ages 10-12) and later when they self-report on their intentions with regard to their further educational path (between ages 16-17). To identify the treatment effect, we use a regression-control framework as well as an instrumental variable approach (based on local supply of schools). In a second step, we carefully examine the influence of unobservable characteristics, using the new technique proposed by Altonji, Elder, and Taber (2005b). Our findings suggest that unobservable characteristics are indeed crucial to the validity of the research design. While we find large positive and significant effects of attending a high-quality school, we cannot rule out that the estimates are not in fact driven by selection on unobservables.

Suggested Citation

  • Ronny Freier & Johanna Storck, 2012. "The Treatment Effect of Attending a High-Quality School and the Influence of Unobservables," Discussion Papers of DIW Berlin 1256, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1256
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    Cited by:

    1. Daniel A. Kamhöfer & Hendrik Schmitz, 2013. "Analyzing Zero Returns to Education in Germany – Heterogeneous Eff ects and Skill Formation," Ruhr Economic Papers 0446, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    2. Freier, Ronny & Schumann, Mathias & Siedler, Thomas, 2015. "The earnings returns to graduating with honors — Evidence from law graduates," Labour Economics, Elsevier, vol. 34(C), pages 39-50.
    3. Kamhöfer, Daniel A. & Schmitz, Hendrik, 2013. "Analyzing Zero Returns to Education in Germany – Heterogeneous Effects and Skill Formation," Ruhr Economic Papers 446, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. repec:zbw:rwirep:0446 is not listed on IDEAS
    5. Schumann, Mathias & Freier, Ronny & Siedler, Thomas, 2014. "The Economic Returns to Graduating with Honors - Evidence from Law Graduates," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100338, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    secondary school choice; school quality instrumental variable estimation; selection on unobservables;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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