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A Comprehensive Approach to School Choice and Education

Periodic Reporting for period 4 - CompSCHoice (A Comprehensive Approach to School Choice and Education)

Reporting period: 2019-04-01 to 2020-12-31

Two thirds of OECD countries have implemented school choice in the last decades. Little is know about the implications of school choice on the educational landscape.

Three different and disconnected literatures in economics provide different and often contradicting answers to the analysis of school choice. This project proposes a unified theoretical framework that merges these three literatures and allows for a comprehensive analysis on school choice design and its impact on actual choice, outcomes and segregation in schools and neighbourhoods. The work is organised along several subprojects and unique and newly constructed data sets from Barcelona and Catalunya are used to address novel empirical challenges.

It has become evident in recent years that the impact the educational policies may have shall not be only measured through test scores. In education has been shown to impact not only cognitive skills, but also non-cognitive skills. The problem is that we do not have adequate measures for these skills. This project has provided a set of simple evidence-based assessments to facilitate the development of socioemotional skills in educational frameworks, what we call Pentabilities.
The following describe the progress made on different fronts. All papers and outcomes can be found under the website:

1) School choice and sorting in school. We show that the widely used Boston Mechanism (BM) fosters ability and socioeconomic segregation across otherwise identical public schools. The existence of private schools makes the best public school more elitist, while reducing the peer quality of the worst school. The main alternative assignment mechanism, Deferred Acceptance, is resilient to such sorting effects. The resulting paper has been accepted for publication at the Economic Journal.

“Catchment Areas and Access to Better Schools” compares popular school choice mechanisms in terms of children's access to better schools (ABS) than their catchment area school, in districts with school stratification and where priority is given for residence in the catchment area of the school. In a large market model with two good schools and one bad school, we find that both the Boston Mechanism and Deferred Acceptance, the most popular assignment mechanisms, convey a non-negligible possibility that catchment area priority determines the final assignment to a large extent regardless parents’ preferences. Top-Trading Cycles is an alternative that provides more access to better schools than DA. This paper is under revision at the International Economic Review.

"Random Assignments and Outside Options". Most environments where assignment mechanisms (possibly random) are used are such that participants have outside options. For instance private schools and private housing are options that participants in a public choice or public housing assignment problems may have. We postulate that, in cardinal mechanisms, chances inside the assignment process could favor agents with better outside options. By imposing a Robustness To Outside Options (RTOO) condition, we conclude that, on the universal domain of cardinal preferences, any mechanism must be (interim) ordinal. This paper is forthcoming at the Social Choice and Welfare.

2) Structural Estimation of Preferences and Counterfactual Analysis of Mechanisms. We model household choice of schools under the Boston mechanism (BM) and develop a new method, applicable to a broad class of mechanisms, to fully solve the choice problem even if it is infeasible via the traditional method. We estimate the joint distribution of household preferences and sophistication types using administrative data from Barcelona. Counterfactual policy analyses show that a change from BM to the Deferred Acceptance mechanism would decrease average welfare by 1,020 euros, while a change to the top trading cycles mechanism would increase average welfare by 460 euros. This paper is published at the Journal of Political Economy.

Within this line also the paper “Priorities in School Choice: The Case of the Boston Mechanism in Barcelona” was published in the Journal of Public Economics.

The Boston mechanism is a school allocation procedure that is widely used around the world and has been criticized for its incentive problems. We identify that a large fraction of families systematically ranks first high priority schools, neighborhood schools in this case. Additional data on school enrollment decisions and census data shows that some seemingly unsophisticated parents are high income families that can rank hard-to-get schools because they can afford the outside option of a private school in case they do not get in. This sheds light on important inequalities beyond parents’ lack of sophistication found in the literature.

3) We show that teachers in Catalunya compare students when grading, that is, by comparing their performance to that of their peers. We call this phenomena grading on a curve. Student access to education levels, tracks or majors is usually determined by their previous performance, measured either by internal exams, designed and graded by teachers in school, or external exams, designed and graded by central authorities. We say teachers grade on a curve whenever having better peers harms the evaluation obtained by a given student. We use rich administrative records from public schools in Catalonia to provide evidence that teachers indeed grade on a curve, leading to negative peer effects. This puts forth a source of distortion that may arise in any system that uses internal grades to compare students across schools and classes. We find suggestive evidence that school choice is impacted only the year when internal grades matter for future prospects.

4) We initially intended to use data from New Orleans to identify the willingness to pay for school by families in the city using variation caused by hurricane Katrina. We were exploiting discontinuities in loan size and condition attached to relocation decision. In the end there was not enough power in our source of variation and we had to cancel this line of research. We substituted it by a line of research that aimed at understanding the objectives of the Catalonian government when designing school assignment procedures. For that we accessed data from all municipalitites in Catalonia, geocoded all the lines in maps describing schools disctricts and identified for how many municipalities 1) there was more than one district 2) the districts had changed over time. We found that a very small number of municipalities has changed, so we need to adjust our identification strategy and it is not clear we'll succeed.

5) Measuring non-cognitive traits. We provide novel measures of non cognitive skills that shall help us evaluate school systems on these very relevant dimensions. The result of our efforts has resulted in the creation of Pentabilities, a spinoff that shall continue to provide schools with formative assessment tools and methods and researchers with evidence-based measures of socioemotional skills.
We have create Pentabilities, a spinoff from the project that shall make the results on the development of socioemotional skills accessible to all kinds of educational entities: schools, vocational training, universities and human resource departments.