The effects of school closure threats on student performance: Evidence from a natural experiment

Ming Ming CHIU, Sung Wook JOH, Lawrence KHOO

Research output: Contribution to journalArticle

Abstract

We exploit a natural experiment to test whether school closure threats can increase staff effort and improve performance. The Hong Kong government overestimated post-1997-Handover mainland Chinese immigration and local births, creating excess capacity in many school districts. In 2003, with student enrollment falling to new lows (increasing cost per student), the government announced that it would close schools that were unable to recruit enough students. Since schools compete for students within their own district, the accidental excess capacity created closure threats that varied by district. Difference-in-differences analyses show that after initiation of this policy, student scores in heavily overbuilt districts were lower than scores in other districts and lowest in districts with the fewest students per class. Although closure threats were counterproductive for improving performance, the school closures eventually improved overall school quality, as typically, the lowest performing schools in each district closed. Copyright © 2016 by De Gruyter.

Original languageEnglish
Article number20150149
JournalB.E. Journal of Economic Analysis and Policy
Volume16
Issue number4
Early online dateJun 2016
DOIs
Publication statusPublished - 2016

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Threat
Student performance
Closure
Natural experiment
Government
Excess capacity
Enrollment
School districts
Hong Kong
Difference-in-differences
School quality
Immigration
Staff
Costs

Citation

Chiu, M. M., Joh, S. W., & Khoo, L. (2016). The effects of school closure threats on student performance: Evidence from a natural experiment. The B.E. Journal of Economic Analysis & Policy, 16(4). Retrieved from http://dx.doi.org/10.1515/bejeap-2015-0149

Keywords

  • Closure threat
  • Excess capacity
  • Competition
  • School performance
  • Natural experiment