School Accountability: (How) Can We Reward Schools and Avoid Cream-Skimming?

38 Pages Posted: 16 Jan 2010

See all articles by Erwin Ooghe

Erwin Ooghe

Catholic University of Leuven (KUL) - Center for Economic Studies

Erik Schokkaert

Catholic University of Leuven (KUL)

Date Written: November 2009

Abstract

Introducing school accountability may create incentives for efficiency. However, if the performance measure used does not correct for pupil characteristics, it will lead to an inequitable treatment of schools and create perverse incentives for cream-skimming. We apply the theory of fair allocation to show how to integrate empirical information about the educational production function in a coherent theoretical framework. The requirements of rewarding performance and correcting for pupil characteristics are incompatible if we want the funding scheme to be applicable for all educational production functions. However, we characterize an attractive subsidy scheme under specific restrictions on the educational production function. This subsidy scheme uses only information which can be controlled easily by the regulator. We show with Flemish data how the proposed funding scheme can be implemented. Correcting for pupil characteristics has a strong impact on the subsidies (and on the underlying performance ranking) of schools.

Suggested Citation

Ooghe, Erwin and Schokkaert, Erik, School Accountability: (How) Can We Reward Schools and Avoid Cream-Skimming? (November 2009). Available at SSRN: https://ssrn.com/abstract=1536399 or http://dx.doi.org/10.2139/ssrn.1536399

Erwin Ooghe (Contact Author)

Catholic University of Leuven (KUL) - Center for Economic Studies ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Erik Schokkaert

Catholic University of Leuven (KUL) ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

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