Caroline M. Hoxby

The Effects of Class Size on Student Achievement: New Evidence from Population Variation

I identify the effects of class size on student achievement using longitudinal variation in the population associated with each grade in 649 elementary schools. I use variation in class size driven by idiosyncratic variation in the population. I also use discrete jumps in class size that occur when a small change in enrollment triggers a maximum or minimum class size rule. The estimates indicate that class size does not have a statistically significant effect on student achievement. I rule out even modest effects (2 to 4 percent of a standard deviation in scores for a 10 percent reduction in class size).

Political Jurisdictions in Heterogeneous Communities

We investigate whether political jurisdictions form in response to the trade‐off between economies of scale and the costs of a heterogeneous population. We consider heterogeneity in income, race, ethnicity, and religion, and we test the model using American school districts, school attendance areas, municipalities, and special districts. We find strong evidence of a trade‐off between economies of scale and racial heterogeneity; we also find evidence of a trade‐off between economies of scale and income heterogeneity. Conversely, we find little evidence that ethnic or religious heterogeneity shapes jurisdictions. To clarify the direction of causality between heterogeneity and jurisdictions, we exploit shocks to racial heterogeneity generated by the two world wars.

Productivity in Education: The Quintessential Upstream Industry

Using consistent test score data from the National Assessment of Educational Progress and data on per-pupil spending, I show that the productivity of American public schools fell by approximately half from 1970 to 2000. The most reliable international data also suggest that productivity in American public schools is lower than that of numerous other industrialized countries, including the remaining English-speaking ones. I explore explanations for the decline in productivity, including changing sociodemographics, Baumols “cost disease,” rising wages of female college graduates, the increasing emphasis on educating disadvantaged children, rising market power, and the education sectors relative decrease in pay for performance. I review evidence that suggests that schools raise their productivity and use of pay for performance when they face competition. I also describe results that indicate that individual teachers have important, distinctive effects on achievement.

The Returns to the Federal Tax Credits for Higher Education

Three tax credits benefit households who pay tuition and fees for higher education. The credits have been justified as an investment by generating more educated people and thus more earnings and externalities associated with education. The credits have also been justified purely as tax cuts to benefit the middle class. In 2009, the generosity of and eligibility for the tax credits expanded enormously so that their 2011 cost was

Does Competition Among Public Schools Benefit Students and Taxpayers

25 billion. Using selected, de-identified data from the population of potential filers, we show how the credits are distributed across households with different incomes. We estimate the causal effects of the federal tax credits using two empirical strategies (regression kink and simulated instruments), which we show to be strong and very credibly valid for this application. The latter strategy exploits the massive expansion of the credits in 2009. We present causal estimates of the credits’ effects on postsecondary attendance, the type of college attended, the resources experienced in college, tuition paid, and financial aid received. We discuss the implications of our findings for society’s return on investment and for the tax credits’ budget neutrality over the long term (whether higher lifetime earnings generate sufficient taxes to recoup the tax expenditures). We assess several explanations as to why the credits appear to have negligible causal effects.