May 16, 2014
Caroline Hoxby of Stanford University, Organizer

Christopher Walters, University of California, Berkeley

Inputs in the Production of Early Childhood Human Capital: Evidence from Head Start

Studies of small-scale "model" early childhood programs show that high-quality preschool can have transformative effects on human capital and economic outcomes. Evidence on the Head Start program is more mixed. Inputs and practices vary widely across Head Start centers, and little is known about variation in effectiveness within Head Start. Walters uses data from a multi-site randomized evaluation to quantify and explain variation in effectiveness across Head Start childcare centers. He answers two questions: 1, how much do short-run effects vary across Head Start centers? and 2, to what extent do inputs and practices explain this variation? To answer the first question, the author develops a random coefficients sample selection model that quantifies heterogeneity in Head Start effects, accounting for non-compliance with experimental assignments. Empirical Bayes estimates of the model show that the cross-center standard deviation of cognitive effects is 0.18 test score standard deviations, which is larger than typical estimates of variation in teacher or school effectiveness. Next, the author assesses the role of inputs in generating this variation, focusing on inputs commonly cited as central to the success of model programs. His results show that Head Start centers offering full-day service boost cognitive skills more than other centers do, while Head Start centers offering frequent home visits are especially effective at improving non-cognitive skills. Other key inputs, including the High/Scope curriculum, teacher education and certification, and class size, are not associated with increased effectiveness in Head Start. Together, observed inputs explain a small share of the variation in Head Start effectiveness. An investigation of the role of counterfactual childcare choices suggests that cross-center differences in effects may be partially attributable to differences in rates of private preschool attendance.

Maria Fitzpatrick, Cornell University and NBER

Intergovernmental (Dis)incentives Free-Riding Teacher Salaries and Teacher Pensions

In this paper, Fitzpatrick documents evidence that intergovernmental incentives inherent in public sector defined benefit pension systems distort the amount and timing of income for public school teachers. This intergovernmental incentive stems from the fact that in many states local school districts are responsible for setting the compensation that determines the size of pensions, but are not required to make contributions to cover the resulting pension fund liabilities. The author uses the introduction of a policy that required experience rating on compensation increases above a certain limit in a differences-in-differences framework to identify whether districts are willing to pay the full costs of their compensation promises. In response to the policy, the size and distribution of compensation changed significantly. On average, public school employees received lower wages largely through the removal of retirement

Rebecca Dizon-Ross, MIT

How Do School Accountability Reforms Affect Teachers? Evidence from New York City

A commonly cited concern with holding schools accountable for student performance is that it could cause good teachers to leave low-performing schools. Using data from New York City, which assigns school grades based on student achievement, Dizon-Ross performs a regression discontinuity analysis and finds the opposite effect. At the bottom end of the school grade distribution, a lower accountability grade decreases teacher turnover, especially for high-quality teachers, and increases joining teachers' quality. One potential explanation is that accountability induces performance improvements at lower-graded schools. In contrast, at the top of the grade distribution, where accountability pressures are lower, a lower grade has no turnover effects, but decreases joiner quality.

Rajeev Darolia and Cory Koedel, University of Missouri, and Francisco Martorell and Katie Wilson, RAND Corporation

Do Employers Prefer Workers Who Attend For-Profit Colleges? Evidence from a Field Experiment

Darolia, Koedel, Martorell, and Wilson report results from a resume-based field experiment designed to examine employer preferences for job applicants who attend for-profit colleges. They sent more than 8,000 fictitious resumes of young job applicants who recently completed their schooling to online job postings in six occupational categories and seven major cities in the United States. Resumes were randomly assigned to list either no postsecondary schooling or sub-baccalaureate credentials from a for-profit or public institution. The authors find no evidence to suggest that employers prefer applicants with for-profit college credentials relative to those with credentials from public community colleges. If anything, their results suggest employers prefer applicants who attended public community colleges. In their comparisons between applicants with and without postsecondary experience, the authors cannot statistically distinguish an effect of two-year college credentials on employer response rates. Their estimates do not rule out modest returns to postsecondary experience, particularly at public community colleges, but their findings are inconsistent with the presence of large effects of sub-baccalaureate postsecondary credentials on employer interest in job applicants.

Ben Marx, Columbia University, and Lesley Turner, University of Maryland

Borrowing Trouble? Student Loans, the Cost of Borrowing, and Implications for the Effectiveness of Need-Based Grant Aid

In this paper, Marx and Turner estimate the impact of need-based grant aid on City University of New York students' borrowing and educational attainment using regression discontinuity and regression kink designs. Pell Grant aid reduces borrowing: on average, an additional dollar of Pell Grant aid leads to a $0.43 reduction in federal loans. Among borrowers, a dollar of Pell Grant aid crowds out more than $1.80 of loans. A simple model illustrates that the findings are consistent with students facing a fixed cost of incurring debt. The presence of such a fixed cost may lead to the unintended consequence of additional grant aid decreasing some students' attainment. Empirically, the authors can rule out modest impacts of Pell Grant aid on effort, persistence, and attainment. Finally, they show that the fixed cost has economically meaningful impacts on behavior: they estimate that relaxing it would increase borrowing by more than 300 percent.

Francisco Martorell, RAND Corporation; Isaac McFarlin, University of Michigan; and Kevin Stange, University of Michigan and NBER

Investing in Schools: Capital Spending, School Conditions, and Student Achievement

Public investments in repairs, modernization, and construction of schools cost billions. Yet little is known of the nature of infrastructure investments and the subsequent causal impacts on student outcomes. Because capital investments take many forms that can vary within particular school districts, it could operate to close (or widen) achievement gaps. Martorell, McFarlin, and Stange characterize capital spending resulting from successful bond elections and evaluate its impact on student performance by exploiting spending variation generated by close school bond elections. School districts with successful and unsuccessful bond measures in close elections are similar in initial spending levels and predetermined attributes, but starkly different in capital investments following elections, suggesting that close elections generate spending variation that mimics randomization. The authors find that bond passage leads to tangible improvements in facility conditions at older campuses. Overall, they find modest increases in school attendance and student achievement, primarily among poor students. These gains occur at existing campuses, suggesting that renovations, not merely the construction of new schools, can improve student achievement.

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