| The three chapters of this dissertation focus on two of the fundamental propositions that are currently driving education policy: (a) that market incentives can be used to improve school efficiency without causing adverse social consequences; and (b) that the level and allocation of school resources is not optimal. The wide range of research results related to these ideas is partially explained by methodological problems. Therefore, the evidence presented relates both to the propositions and to methodological issues that apply more broadly.;Chapter 1. "Charter School Location." The intention of charter school programs, and school choice programs more generally, is to use market mechanisms to improve school efficiency, innovation, and program variety. This study provides evidence on these issues using data on Michigan and California. The number of charter schools in each school district is regressed on the characteristics of students and public schools in those same districts. The results indicate that more charter schools locate where populations are diverse in terms of race, income, and adult education levels. This is interpreted as demand for horizontal differentiation, reflecting both preferences for homogeneous student populations and preferences for specific education programs. In both states, charter school location is negatively related with public school test scores. This implies that parents pay attention to test scores (vertical differentiation), even though these scores may be imperfect signals for school performance.;Chapter 2. "New Approaches to Meta-Analysis with Applications to Education Production Functions." Meta-analysis is potentially useful in reconciling differences in results across studies. However, common approaches make untested, and potentially false, assumptions about the role of methodology in explaining these differences. In the case of education production functions (EPF), I find that observed methodological differences explain 47--57 percent of the variation in parameter estimates, i.e., "methodology matters" when trying to understand whether money matters in education. In addition, I show that experimental evidence relating to EPF parameters is quite robust, providing useful information for identifying gold standard econometric techniques.;Chapter 3. "Optimal School Inputs." The level of real resources going to U.S. schools has tripled since 1960, and increasing portions are going toward smaller class sizes. It has been difficult to evaluate these reforms because the effects that school inputs have on student outcomes have been imprecisely estimated. Chapter 2 suggests that school input effects are positive and magnitudes fall within a relatively narrow range. However, there is little, if any, evidence about whether these new estimates are large enough to justify recent policy reforms. Here, new estimates are used in a calibrated partial equilibrium model to estimate the socially optimal level and allocation of resources. The results suggest that increases in human capital from current school inputs are not sufficient to justify the current level of resources. In addition, the portion of resources going toward teacher salaries is too small relative to class size reductions. |
