Academic journal article The European Journal of Comparative Economics

Regional School Choice and School Selectivity: How Do They Relate to Student Performance? Evidence from PISA 2003

Academic journal article The European Journal of Comparative Economics

Regional School Choice and School Selectivity: How Do They Relate to Student Performance? Evidence from PISA 2003

Article excerpt

1. Introduction

One of the first empirical studies of the factors that influence student's scholastic results was the 'Coleman Report' (Coleman et al. 1966). The authors found that, in the US, more financial resources in schools were not significantly related to higher student test scores. To the contrary, the most important predictor of test scores was the socioeconomic background of pupils. Since then, international research has not produced clear-cut evidence on the effect of additional funding on student performance (Hanushek, 2003). As a result, attention shifted to other factors that could have a significant impact on student test scores. In particular, authors turned to the incentives to teacher and student effort that resulted from the institutional settings of educational systems (Hanushek, 1997; Woessmann, 2003). This paper fits into the latter category as we study how the regional practice of school choice and school selectivity relate to student test scores.

In the United States as well as in the United Kingdom, allowing free school choice has become a popular guideline of educational policy. The idea behind this type of policy is that the possibility of school choice combined with information on school quality will result in competition between schools. This is predicted to create incentives for schools to perform better as they try to attract more pupils and/or more funding. In short, schools are expected to increase their effort in providing high quality education.

However, there are severe impediments to the realisation of this prediction following the introduction of school choice. First of all, there is the absence of sanctions for low-performing schools. Incentives to productivity in a classical market are ensured by inefficient firms leaving the market. But low-performing schools are rarely closed since they are public institutions. As a consequence, if school choice is to deliver incentives to effort for low-performing schools, sanctions and/or help for quality improvement should be provided by the educational authority.

A further obstacle to the functioning of school competition as an incentive for school effort could be the unavailability of information on school performance. Information on school performance is a crucial requirement for school competition to be effective in increasing school effort. As parents and institutions are able to identify the low-performing schools, these can be sanctioned (or helped) accordingly. If information on school performance is not (publicly) available, as is often the case in Europe, school choice may foster segregation and selectivity of schools. In effect, in the absence of objective information on school quality, parents will tend to choose their children's school based on observed quality of the peer pupils, contributing to sorting of pupils by socio-economic status and abilities at entry. In such a context, schools moreover have an incentive to select pupils according to performance. In effect, admitting only better performing pupils ensures the schools a good reputation at low costs, because lower performing pupils do not need to be taken care off.

The sorting of pupils that results from school selectivity and parents' peer-based school choice may have several effects on pupil performance. On the one hand, pupil sorting generates specific peer effects. Theoretical models predict that low performing pupils will suffer and high performing pupils will benefit from being grouped according to ability. However the evidence on peer effects in the empirical literature is mixed (see e.g. Levin 2001, Rangvid 2003). Low-performing pupils may face lower teacher expectations and develop less confidence in their learning skills as they and their teachers are aware of being classified in a low ability school/group. But teaching methods and materials may be better adapted to match the ability of the group.

On the other hand, selectivity of secondary schools may provide an incentive to effort in primary school pupils similar to that of an external evaluation standard (see e. …

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