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Competition, Student Sorting, and Performance Gains in Local Education Markets: The Dutch Secondary Sector

Sofie J. Cabus & Ilja Cornelisz



This paper empirically tests the e?ect of competition between Dutch schools: (1) on the sorting of students by performance levels in schools at the start of secondary education; and (2) on performance gains in the secondary school career controlling for sorting patterns. We use data from about 13,000 students going to 102 di?erent school locations in the Netherlands. Using di?erences in the distribution of competition intensity across education markets, we apply Kernel estimation techniques to match students from relatively high- to low-competitive markets on the basis of student-level and household-level characteristics. Our results indicate that with increasing competition, relatively more schools target the group of high-achieving students. As a result, schools have to settle for enrolling more ‘students at the margin’, as to ensure su? cient enrollment rates. To conclude, we observe that, accounting for sorting patterns, competition is related to small improvements in academic achievement at the bottom of the distribution of student performance within the …rst three years of secondary education. However, a negative impact of competition is found for categorical academic classrooms settings. JEL: I21; I28 Key words: Competition; Local Education Markets; Sorting

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