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The Distributional Consequences of Public School Choice

Christopher Avery and Parag Pathak

No 21525, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: School choice systems aspire to delink residential location and school assignments by allowing children to apply to schools outside of their neighborhood. However, the introduction of choice programs affect incentives to live in certain neighborhoods, which may undermine the goals of choice programs. We investigate this possibility by developing a model of public school and residential choice. We consider two variants, one with an exogenous outside option and one endogenizing the outside option by considering interactions between two adjacent towns. In both cases, school choice rules narrow the range between the highest and lowest quality schools compared to neighborhood assignment rules, and these changes in school quality are capitalized into equilibrium housing prices. This compressed distribution generates incentives for both the highest and lowest types to move out of cities with school choice, typically producing worse outcomes for low types than neighborhood assignment rules. Paradoxically, even when choice results in improvement in the worst performing schools, the lowest type residents may not benefit.

JEL-codes: H44 I20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu, nep-pbe and nep-ure
Date: 2015-09
Note: ED LS PE
References: View references in EconPapers View complete reference list from CitEc
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