Self-Selection in The State School System

Donald Robertson and James Symons

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: With diminishing returns to the peer group, it is optimal social policy to mix chldren in schools. We consider what happens when, contrary to the outcome being determined by a social planner, schools and children are free to seek each other out: with some caveats, this leads to perfect segregation by child quality. It is shown that this is the worst possible outcome. We show also that a competitive system produces the optimal allocation of children to schools.

Date: 1996-11
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