Scale Economies Can Offset the Benefits of Competition: Evidence from a School Consolidation Reform in a Universal Voucher System

Monique De Haan, Edwin Leuven and Hessel Oosterbeek

No 5528, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: A large school consolidation reform in the Netherlands changed minimum school size rules underlying public funding. The supply of schools decreased by 15 percent, but this varied considerably across municipalities. We find that reducing the number of schools by 10 percent increases pupils' achievement by 3 percent of a standard deviation. A reduction in the supply of schools implies, for a given number of pupils, an increase in average school size. We present evidence that in our context scale economies dominated the effects of choice and competition. This points to an often ignored trade-off between scale and competition.

Keywords: economies of scale; achievement; school consolidation; competition; school choice (search for similar items in EconPapers)
JEL-codes: D40 H75 I21 I22 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2011-02
New Economics Papers: this item is included in nep-edu, nep-lab and nep-ure
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Citations: View citations in EconPapers (3)

Published - published as 'School Consolidation and Student Achievement' in: Journal of Law, Economics and Organization, 2016, 32 (4), 816 - 139

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Working Paper: Scale economies can offset the benefits of competition: Evidence from a school consolidation reform in a universal voucher syst (2011)
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