Estimating the Direct and Indirect Effects of Major Education Reforms

Michael Gilraine, Hugh Macartney and Robert McMillan

No 24191, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We propose an approach for credibly estimating indirect sorting effects of major education reforms and placing them alongside the reforms' direct and persistent effects for the first time. Applying our approach to California's state-wide class size reduction program, we estimate a large positive direct effect of smaller classes on test scores and an even larger indirect effect due to demographic changes as private school students switch into public schools; both effects also persist. Accounting for sorting using these estimates raises the program's benefit-cost ratio significantly. Further, our analysis indicates that indirect sorting is likely relevant in policy evaluations more generally.

JEL-codes: H40 I21 I22 (search for similar items in EconPapers)
Date: 2018-01
New Economics Papers: this item is included in nep-edu and nep-ure
Note: CH ED LS PE
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