Title: Essays in the Economics of Education
Description: Education is at the center of upskilling human capital in developing countries, thereby positively influencing economic growth and development. For decades, many education policies targeted at developing countries have been narrowly focused on improving access to basic education (Barrett et al., 2015). However, access to education does not always translate into educational attainment. Thus, beyond the initial goal of expanding access to education in developing countries, there has been a growing focus on delivering quality education on the development agenda for developing countries in recent years. One popular policy instrument in enhancing education quality has been school choice. Analysis of school choice and the subsequent academic performance outcomes can provide new insight on the economics of education to policymakers, schools, parents and students alike. This dissertation consists of three essays, which focus on understanding the demand for public schools and the returns to school quality in a merit-based competitive school assignment system.

In particular, these papers investigate how positive recognition of ability through awards can affect the students’ decision-making process; what the students might gain from attending a more selective school; and how students balance between their preferences for school characteristics and maximizing their chances of admission in a competitive school choice market. Altogether, this dissertation highlights the role of information as well as educational background in explaining differences in school choice decisions and achievement outcomes. In chapter 1, I examine the role of positive recognition on students’ school choice decisions and achievement outcomes in the context of academic competitions. Academic competitions are an essential aspect of education. Given the prevalence and the amount of resources spent organizing them, a natural question that arises is the extent of the impact on winners’ education outcomes when their talent is recognized. I exploit the award structure in Vietnam’s annual regional academic competitions to answer this question.

By leveraging the pre-determined share of awards, I apply a regression discontinuity design to assess the effects of receiving a Prize and receiving an Honorable Mention. I find that both types of awards lead to improvements in educational outcomes, and the results are persistent after three years. I also find some evidence of specialization associated with receiving a Prize Award. I hypothesize that long-term effects can be partially explained by school choice: winners are significantly more likely to apply to and consequently enroll in higher-quality schools. There are also prominent differences in educational choices and outcomes along gender lines: female students are more sensitive to award receipts than male students. These findings underscore the positive motivational effects of awards, even among the top performers in a highly competitive schooling market. In chapter 2, I explore the impacts of attending a selective school on students’ educational outcomes. Students in Vietnam are assigned to public high schools based on their performance in a placement exam as well as their ranked choice of schools.

Public schools are often oversubscribed, which contributes to exogeneous admission score cutoffs below which students are not considered for admission. By applying a regression discontinuity research design to these admission score cutoffs, I find that students who are marginally admitted to their top-choice public schools are exposed to significantly higher-achieving peers while finding themselves at the bottom of the ability distribution. They experience some improvements in standardized test scores at the end of their high school, but fare worse in school-based achievements and graduation outcomes. These findings highlight the importance of the potential trade-offs between attending more selective schools with better peer quality while receiving a lower ordinal rank in the ability distribution in the assigned school. In addition, the impacts of selective schools on students vary along the lines of the students’ own attitude towards studying as well as their middle school educational background.

This substantial heterogeneity collectively highlights the importance of considering the students’ past educational background in interpreting how selective schools might impact students’ outcomes. In chapter 3, I investigate students’ preferences, strategic behaviors and welfare outcomes under a competitive school choice market by conducting a survey on school choice participants in two school districts in Vietnam. The original survey data on school choice participants, coupled with administrative data, afford me the opportunity to understand true preferences and strategies without involving strong assumptions on the students’ beliefs. In order to balance out their own preferences and chance of admission in such a competitive setting, the majority of students exhibit strategic behaviors. However, students from less advanced educational backgrounds tend to have large belief errors and are more likely to make strategic mistakes. Consequently, these students are at a disadvantage, as they find themselves among lower-achieving peers in their new schools.

With preference data from the survey, I estimate the students’ preferences for school characteristics and find evidence of heterogeneity in students’ preferences for school characteristics: students from more advanced educational backgrounds value school selectivity and teacher qualification more than their peers. Using these estimates to evaluate students’ welfare under the current assignment mechanism as well as a counterfactual strategy-proof deferred acceptance algorithm, I find that switching to deferred acceptance algorithm can be welfare-improving, particularly for high-performing students. Overall, this paper provides a starting point to directly study the drawbacks of manipulable assignment mechanisms by using survey data and highlight the potential disparity in preferences and application strategies that can further widen the gap in educational mobility.