Current Issue: Volume 14, Issue 1, Winter 2019

Education Finance and Policy - Volume 14, Issue 1, Winter 2019


School Choice in Amsterdam: Which Schools are Chosen When School Choice is Free?. Nienke Ruijs and Hessel Oosterbeek. Education Finance and Policy Winter 2019, Vol. 14, No. 1, pp. 1–30.

Using discrete choice models, this paper investigates the determinants of secondary school choice in the city of Amsterdam. In this city, there are many schools to choose from and school choice is virtually unrestricted (no catchment areas, low or no tuition fees, short distances). We find that school choice is related to exam grades and the quality of incoming students, but not to progression in lower grades, no delay in higher grades, and a composite measure of quality published by a national newspaper. Furthermore, students appear to prefer schools that are close to their home and schools that many of their former classmates in primary school attend.

Court-Ordered Finance Reforms in the Adequacy Era: Heterogeneous Causal Effects and Sensitivity. Christopher A. Candelaria and Kenneth A. Shores. Education Finance and Policy Winter 2019, Vol. 14, No. 1, pp. 31–60.

We provide new evidence about the effect of court-ordered finance reforms that took place between 1989 and 2010 on per-pupil revenues and graduation rates. We account for heterogeneity in the treated and counterfactual groups to estimate the effect of overturning a state's finance system. Seven years after reform, the highest poverty quartile in a treated state experienced an 11.5 percent to 12.1 percent increase in per-pupil spending, and a 6.8 to 11.5 percentage point increase in graduation rates. We subject the model to various sensitivity tests, which provide upper and lower bounds on the estimates. Estimates range, in most cases, from 6 to 12 percentage points for graduation rates.

Household Education Spending in Latin America and the Caribbean: Evidence from Income and Expenditure Surveys. Santiago Acerenza and Néstor Gandelman. Education Finance and Policy Winter 2019, Vol. 14, No. 1, pp. 61–87.

This paper characterizes household spending in education using microdata from income and expenditure surveys for twelve Latin American and Caribbean countries and the United States. Bahamas, Chile, and Mexico have the highest household spending in education and Bolivia, Brazil, and Paraguay have the lowest. Tertiary education is the most important form of spending, and most educational spending is performed for 18- to 23-year-old individuals. More educated and wealthier household heads spend more in the education of household members. Households with both parents present and those with a female main income provider spend more than their counterparts. Urban households also spend more than rural households. On average, education in Latin America and the Caribbean is a luxury good, whereas it may be a necessity in the United States. No gender bias is found in primary education, but at secondary school age and up households invest more in females than in males.

What Constitutes Prudent Spending from Private College Endowments? Evidence from Underwater Funds. Drew M. Anderson. Education Finance and Policy Winter 2019, Vol. 14, No. 1, pp. 88–114.

This study examines how private colleges and universities choose to spend versus reinvest resources in endowment funds that have suffered investment losses. The analysis takes advantage of a market downturn and public policy shift, which together revealed how colleges define prudent spending. Investment losses during the financial crisis of 2008 left many endowment gift funds below their original donated values, or “underwater.” Colleges in some states were legally required to cut spending from underwater funds. Other states had recently enacted the Uniform Prudent Management of Institutional Funds Act, which allows prudent spending from underwater funds. The act loosened financial constraints, and affected colleges responded by spending 22 percent more from their endowments in the fiscal year after the financial crisis. Constrained colleges did not increase spending from unrestricted parts of their endowments to offset reduced spending from underwater funds.

Misattribution of Teacher Value Added. Umut Özek and Zeyu Xu. Education Finance and Policy Winter 2019, Vol. 14, No. 1, pp. 115–148.

The federal Race to the Top competition provided significant impetus for states to adopt value-added models as a part of their teacher evaluation systems. Such models typically link students to their teachers in the spring semester when statewide tests are administered and estimate a teacher's performance based on his or her students’ learning between the test date in the previous school year and the test date in the current year. Because of data limitations in many states, however, the effect of most student learning experiences between two consecutive tests cannot be distinguished from, and hence is often attributed to, the value added of teachers in the spring classrooms. This study examines how teacher evaluations are affected by such misattribution and explores methods that can provide the best approximation in the absence of more detailed data. We find that ignoring previous school-year teachers’ contributions on student learning has a sizeable impact on estimated value-added scores for teachers in the current school year. We also present an alternative approach that can be implemented in the absence of more detailed data on student learning experiences and closely approximates teacher value-added scores that are estimated based on complete student enrollment and roster information.

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