Essays on economics of education
Baker, Olesya Nicole
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This dissertation explores the effectiveness and consequences of three distinct education policies. The first chapter analyzes the effects of high school exit exams on graduation, employment and wage outcomes. We construct a state-graduation year cohort dataset using the Current Population Survey data, US Census data and information on the timing and difficulty of exit exams in different states. Using this dataset we analyze within-state variation in outcomes overtime. Overall, we find relatively modest effects of high school exit exams. We do not find consistent effects on graduation rates for exit exams that assess academic skills taught below the high school level; however, we find that more challenging standards-based exams reduce graduation rates. We also find that about one-half of the reduction in graduation rates associated with exit exams is offset by an increase in GED rates. Our analysis of labor market outcomes suggests that exit exams increase employment rates, but we find no effect of exit exams on the distribution of wages. Chapter two analyzes the institutional consequences of the California Class-Size Reduction (CSR) program. This program provides incentive funding if schools limit the class-size in grades K-3 to twenty or fewer students. We find that some schools and school districts limit their enrollment levels in order to maximize the CSR subsidy payment. In particular, the distribution of grade and district enrollments exhibits a prominent pattern of peaks that occur at multiples of twenty, where CSR payment is the largest. In order to achieve exact enrollment levels, schools must be reassigning students above the desired thresholds to nearby schools or nearby school districts. We also find that schools that limit their enrollments are well-performing schools with a low percentage of students who receive free or reduced price meals. The last chapter analyzes the academic consequences of the Texas Top 10 Percent Law. In 1998, state universities in Texas began using high school class rank as the sole factor in university admissions. This policy was implemented to increase enrollment of minority and economically disadvantaged students, but it generated criticism that such beneficiaries of rank-based admissions lack the academic preparation necessary to perform well in college. I test this claim by analyzing academic performance of rank-eligible students who attended UT Austin before and after the law. To account for grade inflation I use a difference-in-differences framework with students not eligible for rank-based admissions as controls. The difference-in-differences estimates may be overstated, however, because academic quality of the control group may have increased after the law. I use propensity score matching methods to correct for this. Finally, I correct for the confounding effects of GPA ceiling on the difference-in-differences estimates. Both the baseline and the adjusted estimates suggest that mean college GPA of rank-admitted students declined after the law.