Do Students Care About School Quality? Determinants of Dropout Behavior in Developing Countries

43 Pages Posted: 7 Dec 2006 Last revised: 2 Apr 2007

See all articles by Eric A. Hanushek

Eric A. Hanushek

Stanford University - Hoover Institution on War, Revolution and Peace; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute)

Victor Lavy

University of Warwick - Department of Economics; Hebrew University of Jerusalem - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Kohtaro Hitomi

Kyoto Institute of Technology - Department of Architecture and Design

Date Written: December 2006

Abstract

School quality and grade completion by students are shown to be directly linked, leading to very different perspectives on educational policy in developing countries. Unique panel data on primary school age children in Egypt permit estimation of behavioral models of school leaving. Students perceive differences in school quality, measured as expected achievement improvements in a given school, and act on it. Specifically, holding constant the student's own ability and achievement, a student is much less likely to remain in school if attending a low quality school rather than a high quality school. This individually rationale behavior suggests that common arguments about a trade-off between quality and access to schools may misstate the real issue and lead to public investment in too little quality. Further, because of this behavioral linkage, there is an achievement bias such that common estimates of rates of return to years of school will be overstated. The paper demonstrates the analytical importance of employing output-based measures of school quality.

Suggested Citation

Hanushek, Eric A. and Lavy, Victor and Hitomi, Kohtaro, Do Students Care About School Quality? Determinants of Dropout Behavior in Developing Countries (December 2006). NBER Working Paper No. w12737. Available at SSRN: https://ssrn.com/abstract=948650

Eric A. Hanushek (Contact Author)

Stanford University - Hoover Institution on War, Revolution and Peace ( email )

Stanford, CA 94305-6010
United States
650-736-0942 (Phone)
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National Bureau of Economic Research (NBER)

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CESifo (Center for Economic Studies and Ifo Institute)

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Victor Lavy

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom

Hebrew University of Jerusalem - Department of Economics ( email )

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Jerusalem, 91905
Israel
+972 2 588 3245 (Phone)
+972 2 581 6071 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Kohtaro Hitomi

Kyoto Institute of Technology - Department of Architecture and Design ( email )

Kyoto 606-8585
Japan

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