Scale economies can offset the benefits of competition: Evidence from a school consolidation reform in a universal voucher syst

Hessel Oosterbeek, Edwin Leuven and Monique De Haan

No 8272, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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: Scale economies; School choice; School consolidation; Student achievement (search for similar items in EconPapers)
JEL-codes: D40 H75 I21 I22 (search for similar items in EconPapers)
Date: 2011-02
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Citations: View citations in EconPapers (3)

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Working Paper: Scale Economies Can Offset the Benefits of Competition: Evidence from a School Consolidation Reform in a Universal Voucher System (2011)
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