School Competition and Efficiency with Publicly Funded Catholic Schools

64 Pages Posted: 21 Jul 2008 Last revised: 27 Sep 2010

See all articles by David Card

David Card

University of California, Berkeley - Department of Economics; Institute for the Study of Labor (IZA); National Bureau of Economic Research (NBER)

Martin D. Dooley

McMaster University - Department of Economics

A. Abigail Payne

University of Melbourne - Melbourne Institute of Applied Economic and Social Research; McMaster University, Department of Economics

Date Written: July 2008

Abstract

The province of Ontario has two publicly funded school systems: secular schools (known as public schools) that are open to all students, and separate schools that are open to children with Catholic backgrounds. The systems are administered independently and receive equal funding per student. In this paper we use detailed school and student-level data to assess whether competition between the systems leads to improved efficiency. Building on a simple model of school choice, we argue that incentives for effort will be greater in areas where there are more Catholic families, and where these families are less committed to a particular system. To measure the local determinants of cross-system competition we study the effects of school openings on enrollment growth at nearby elementary schools. We find significant cross-system responses to school openings, with a magnitude that is proportional to the fraction of Catholics in the area, and is higher in more rapidly growing areas. We then test whether schools that face greater cross-system competition have higher productivity, as measured by test score gains between 3rd and 6th grade. We estimate a statistically significant but modest-sized impact of potential competition on the growth rate of student achievement. The estimates suggest that extending competition to all students would raise average test scores in 6th grade by 6-8% of a standard deviation.

Suggested Citation

Card, David E. and Dooley, Martin D. and Payne, A. Abigail, School Competition and Efficiency with Publicly Funded Catholic Schools (July 2008). NBER Working Paper No. w14176. Available at SSRN: https://ssrn.com/abstract=1165504

David E. Card (Contact Author)

University of California, Berkeley - Department of Economics ( email )

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Institute for the Study of Labor (IZA)

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National Bureau of Economic Research (NBER)

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Martin D. Dooley

McMaster University - Department of Economics ( email )

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Hamilton, Ontario L8S 4M4
Canada

A. Abigail Payne

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5 111 Barry Street
Carlton, Victoria 3010
Australia
+61 3 9035 4219 (Phone)

McMaster University, Department of Economics ( email )

Hamilton, Ontario L8S 4M4
Canada

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