The effect of school quality on school choice Evidence from secondary education in Hungary Carla Haelermans (Maastricht University, the Netherlands) Zoltán Hermann (Institute of Economics, Budapest, Hungary) Thomas Wouters (KU Leuven, Belgium)

Research questions Does school quality affect school choice? Do parents pay attention to the level of the school, or to added value? Does this effect depend on family background? Do more educated parents give more weight to school quality? 2

Motivation Many countries have a system of school choice Parents and/or students choose school (often based on some constraints (distance, grades, etc.) Increased school choice is assumed to increase school quality through compeittion Equality of opportunity Low EOp when disadvantaged students end up in lower quality schools

Previous literature Evidence on determinants of school choice (Hastings et al, Burgess et al) indicates the following determinants: School quality in performance School denomination (religion/church schools) Educational philosophy / profile Distance to home/work School composition (ethnic/SES) Teachers Information on school quality Information on odds of admission

Motivation and contribution Application data (instead of realised choices) Not directly affected by schools’ decisions Hungarian case: high stake decision Rank-ordered logistic regression School choice in upper secondary instead of primary education Focus on quality Level versus added value (the role of perception) Heterogeneity

Upper secondary education in Hungary 12 Vocational school Vocational secondary track Academic track 11 10 9 8 General school (Primary and lower secondary education) 7 6 5 4 3 2 1

School admission system in Hungary 1. Students apply to programs Choice of educational programs within schools and tracks Students rank these programs 2. Schools rank students Decision on a cutoff entry score Priority for higher scores 3. Centralised matching algorithm No incentive for strategic ranking of schools Non-matched students have to find a school in a second round (not observed)

Data Administrative data for a single cohort: 2006 Matched data from three datasets (~75% of students) Secondary School Application Register Students’ ranked applications National Assesment of Basic Competences Achievement: math and reading test scores in grade Other individual characteristics, including family background Travel time data Public transportation, ZIP-code level

Estimation: rank-ordered logit  

Estimation: rank-ordered logit  

Issues before estimation Estimating school quality and the level of the school Defining feasible choice sets 11

Measuring school quality and level Quality: value-added model A10i,s = β1 A8i,s+ β2 (A8i,s)2 + β3 (A8i,s)3 + δXi,s + θs + εi,s A: student test score in grade 8,10 X: gender, SEN, parental education, number of books θs : school quality random effects, shrinkage estimator Level: school mean of grade 8 scores 12

Creating feasible choice sets Application list: schools chosen by the student Application list + schools chosen by similar students, within feasible travel time (Application list + all schools within feasible travel time) Travel time: 50-90 minutes Further restrictions: only schools in tracks chosen by the student gender composition 50 general rule, 90 maximum

Creating feasible choice sets Similar students: overlap in 1-3. applications Student X Student Y school track 1. A Voc.sec. E academic 2. B F 3. C Voc. 4. D G 5. H 14

Creating feasible choice sets Similar students: overlap in 1-3. applications Student X Student Y school track 1. A Voc.sec. E academic 2. B F 3. C Voc. 4. D G - 5. H 15

Results (actual list) all tracks academic vocational secondary   all tracks academic vocational secondary vocational school log travel time 0.0267** -0.0580*** -0.0359** -0.0497** (0.0124) (0.0203) (0.0172) (0.0240) quality 0.179*** 0.472*** -0.0222 0.0392 (0.0381) (0.0950) (0.0616) (0.0783) level 1.441*** 1.486*** 1.844*** 1.964*** (0.0275) (0.0611) (0.0440) (0.100) Notes: Controls: log settlement size of the school, church- and other private school dummies. Standard errors are clustered at the grade 8 school level.

Results (actual list) all tracks academic vocational secondary   all tracks academic vocational secondary vocational school log travel time 0.0252** -0.0575*** -0.0364** -0.0511** (0.0124) (0.0203) (0.0173) (0.0241) quality 0.149*** 0.582*** -0.0116 0.00181 (0.0522) (0.199) (0.0895) (0.0917) level 1.326*** 1.086*** 1.643*** 1.953*** (0.0363) (0.112) (0.0646) (0.117) parental educ. upper sec. x quality 0.0378 -0.159 -0.0258 0.0462 (0.0725) (0.223) (0.122) (0.169) tertiary x quality 0.115 -0.137 0.00859 0.594** (0.0896) (0.224) (0.165) (0.285) upper sec. x level 0.152*** 0.451*** 0.258*** 0.117 (0.0454) (0.127) (0.0847) (0.209) tertiary x level 0.192*** 0.495*** 0.427*** -0.103 (0.0582) (0.109) (0.341) Notes: Controls: log settlement size of the school, church- and other private school dummies. Standard errors are clustered at the grade 8 school level.

Results (feasible choice set)   all tracks academic vocational secondary vocational school log travel time -0.575*** -0.777*** -0.515*** -0.361*** (0.0123) (0.0208) (0.0149) (0.0153) quality -0.128*** 0.157** 0.158*** -0.127** (0.0300) (0.0758) (0.0438) (0.0567) level 0.0829*** 0.0325 0.268*** 0.709*** (0.0148) (0.0305) (0.0248) (0.0379) Notes: Controls: log settlement size of the school, church- and other private school dummies. Standard errors are clustered at the grade 8 school level.

Results (feasible choice set)   all tracks academic vocational secondary vocational school log travel time -0.577*** -0.775*** -0.517*** -0.362*** (0.0125) (0.0211) (0.0151) (0.0154) quality -0.319*** -0.195* -0.0295 -0.268*** (0.0372) (0.108) (0.0588) (0.0638) level -0.231*** -0.528*** -0.206*** 0.623*** (0.0165) (0.0379) (0.0324) (0.0423) parental educ. upper sec. x quality 0.352*** 0.406*** 0.254*** 0.439*** (0.0441) (0.0648) (0.0856) tertiary x quality 0.425*** 0.348** 0.333*** 0.679*** (0.0653) (0.136) (0.0867) (0.145) upper sec. x level 0.260*** 0.369*** 0.572*** 0.295*** (0.0192) (0.0395) (0.0341) (0.0591) tertiary x level 0.657*** 0.926*** 1.066*** 0.316*** (0.0284) (0.0506) (0.0458) (0.0944) Notes: Controls: log settlement size of the school, church- and other private school dummies. Standard errors are clustered at the grade 8 school level.

Conclusions School quality matters, but school level is at least as important Both quality and level matter more for highly educated parents Relative to quality, school level becomes more important in the lower tracks Heterogeneity ito parental background in preferences for quality only surfaces in feasible choice sets