Scandinavian Working Papers in Economics

Working Paper Series,
Stockholm University, Swedish Institute for Social Research

No 2/2004: The Effect of Extra Funding for Disadvantaged Pupils on Achievement

Edwin Leuven , Mikael Lindahl (), Hessel Oosterbeek and Dinand Webbink
Additional contact information
Edwin Leuven: Department of Economics, University of Amsterdam, NWO Priority Program Scholar
Mikael Lindahl: Swedish Institute for Social Research, Stockholm University, Postal: SOFI, SE-106 91 Stockholm, Sweden
Hessel Oosterbeek: Department of Economics, University of Amsterdam, NWO Priority Program Scholar
Dinand Webbink: NWO Priority Program Scholar and CPB Netherlands Bureau for Economic Policy

Abstract: This paper evaluates the effects of two subsidies targeted at disadvantaged pupils in the Netherlands. The first scheme gives primary schools with at least 70 percent minority pupils extra funding for personnel. The second scheme gives primary schools with at least 70 percent pupils from different disadvantaged groups extra funding for computers and software. The cutoffs at 70 percent provide a regression discontinuity design which we exploit in a local difference-in-differences framework. For both subsidies we find negative point estimates. For the personnel subsidy these are in most cases not significantly different from zero. For the computer subsidy we find more evidence of negative effects. We discuss several explanations for these counterintuitive results.

Keywords: policy evaluation; disadvantaged students; computers; teachers; regression discontinuity

JEL-codes: I21; I28; J24

36 pages, June 7, 2004

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