School Competition, Classroom Formation, and Academic Quality

08.03.2024 14:15 – 15:45

INSTITUTE OF ECONOMICS AND ECONOMETRICS SEMINAR

Abstract:

Racial segregation is an enduring feature of U.S. K-12 education. Up to half of it originates within schools and is due to how classrooms are formed. This paper develops an empirical framework to understand the implications of discretionary classroom formation in competitive education markets. I leverage a school competition reform to document via an event-study that in anticipation of the competitive shock, public schools change students’ assignments to classrooms along the racial dimension. On average, this response increases classroom segregation. I then estimate an empirical model of school choice and competition to understand whether schools choose their level of classroom segregation so as to differentiate horizontally, thereby relaxing vertical competition on costly academic quality. The novelty of the model is that it embeds classroom segregation both on the demand side, as a dimension that parents value, and on the supply side, as a margin of differentiation that schools choose directly alongside academic quality. I estimate preferences for classroom segregation so as to rationalize the reduced-form effects of competition identified through the event-study. I estimate substantial heterogeneity in household preferences for classroom segregation, both across and within racial groups. On the supply side, schools face incentives to enroll a larger share of white students. I use the model to evaluate a policy that requires schools to form racially integrated classrooms, given the composition of the student body. I find that the policy raises aggregate academic quality and the average test score in equilibrium. Magnitude-wise, present value lifetime earnings increase by up to $1,620 per student. Because the schools that increase academic quality the most are located in non-white areas, the learning gains accrue mostly to non-white students, and the racial test score gap decreases by 2%.

Lieu

Uni Mail
Room M 3250
Boulevard du Pont-d'Arve 40
1205 Geneva

entrée libre