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Scale Economies can Offset the Benefits of Competition: Evidence from a School Consolidation Reform in a Universal Voucher System

33 Pages Posted: 14 Mar 2011  

Monique de Haan

affiliation not provided to SSRN

Edwin Leuven

affiliation not provided to SSRN

Hessel Oosterbeek

University of Amsterdam - Research Institute in Economics & Econometrics (RESAM); Tinbergen Institute Amsterdam (TIA); Institute for the Study of Labor (IZA)

Multiple version iconThere are 2 versions of this paper

Date Written: March 1, 2011

Abstract

A large school consolidation reform in the Netherlands changed minimum school size rules underlying public funding. The supply of schools decreased by 15 percent, but this varied considerably across municipalities. We find that reducing the number of schools by 10 percent increases pupils' achievement by 3 percent of a standard deviation. A reduction in the supply of schools implies, for a given number of pupils, an increase in average school size. We present evidence that in our context scale economies dominated the effects of choice and competition. This points to an often ignored trade-off between scale and competition.

Keywords: Scale economies, School choice, School consolidation, Student achievement

JEL Classification: D40, H75, I21, I22

Suggested Citation

de Haan, Monique and Leuven, Edwin and Oosterbeek, Hessel, Scale Economies can Offset the Benefits of Competition: Evidence from a School Consolidation Reform in a Universal Voucher System (March 1, 2011). CEPR Discussion Paper No. DP8272. Available at SSRN: https://ssrn.com/abstract=1782566

Monique De Haan

affiliation not provided to SSRN ( email )

Edwin Leuven

affiliation not provided to SSRN ( email )

Hessel Oosterbeek

University of Amsterdam - Research Institute in Economics & Econometrics (RESAM) ( email )

Roetersstraat 11
Amsterdam
Netherlands
+31 20 525 4242 (Phone)
+31 20 525 5283 (Fax)

HOME PAGE: http://www.fee.uva.nl/scholar/oosterbeek/

Tinbergen Institute Amsterdam (TIA)

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

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