Friday, July 3, 2015

Using Compulsory Mobility to Identify School Quality and Peer Effects

KRAMARZ Francis, MACHIN Stephen, OUAZAD Amine,
Access the publisher's website Oxford Bulletin of Economics and Statistics 77, 4 (2015) 566-587

Education production functions that feature school and student fixed effects are typically identified using student mobility across schools. However, student mobility is driven by factors like parents’ labor market shocks and family events such as divorce. Movers experience large drops in achievement, are more likely to be minority and freemeal students, and sort endogenously into peer groups and school types. We estimate an education production with school quality, peer effects, and the effect of past inputs and exploit an institutional feature of the English primary school system whereby some students must change schools between grades 2 and 3. We refer to these students as ‘compulsory movers’ and, for this subset, we find no evidence of endogenous sorting across peer groups or across school types, nor evidence that students sort between schools attended by compulsory versus noncompulsory movers. Noncompulsory movers bias school quality estimates downward by as much as 20% of the standard deviation.