Estimating the Direct and Indirect Effects of Major Education Reforms

68 Pages Posted: 9 Jan 2018 Last revised: 6 Feb 2022

See all articles by Michael Gilraine

Michael Gilraine

New York University (NYU) - Department of Economics

Hugh Macartney

Duke University - Department of Economics

Robert McMillan

University of Toronto - Department of Economics

Date Written: January 2018

Abstract

We propose an approach for credibly estimating indirect sorting effects of major education reforms and placing them alongside the reforms' direct and persistent effects for the first time. Applying our approach to California's state-wide class size reduction program, we estimate a large positive direct effect of smaller classes on test scores and an even larger indirect effect due to demographic changes as private school students switch into public schools; both effects also persist. Accounting for sorting using these estimates raises the program's benefit-cost ratio significantly. Further, our analysis indicates that indirect sorting is likely relevant in policy evaluations more generally.

Suggested Citation

Gilraine, Michael and Macartney, Hugh and McMillan, Robert, Estimating the Direct and Indirect Effects of Major Education Reforms (January 2018). NBER Working Paper No. w24191, Available at SSRN: https://ssrn.com/abstract=3097983

Michael Gilraine (Contact Author)

New York University (NYU) - Department of Economics ( email )

19 West 4th Street
New York, NY 10012
United States

Hugh Macartney

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States

Robert McMillan

University of Toronto - Department of Economics ( email )

150 St. George Street
Toronto, Ontario M5S 3G7
Canada
416-978-4190 (Phone)
416-978-6713 (Fax)

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