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Can Financial Incentives for Regional Education Authorities Reduce School Dropout?

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  • Roel Elk
  • Marc Steeg
  • Dinand Webbink

Abstract

This paper investigates the effect of a new type of financial incentive in education targeted at regional authorities. Previous studies have focused on financial incentives for students, teachers or schools. We identify the effect by exploiting the gradual introduction of a new policy aimed at reducing school dropout in the Netherlands. The introduction of the policy in 14 out of 39 regions and the use of a specific selection rule for the participating regions allow us to estimate local difference-in-differences models. Using administrative data for all Dutch students in the year before and the year after the introduction of the new policy we find no effect of the financial incentive scheme on school dropout. In addition, we find suggestive evidence for manipulation of outcomes in response to the program. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Roel Elk & Marc Steeg & Dinand Webbink, 2013. "Can Financial Incentives for Regional Education Authorities Reduce School Dropout?," De Economist, Springer, vol. 161(4), pages 367-398, December.
    • Handle: RePEc:kap:decono:v:161:y:2013:i:4:p:367-398
    DOI: 10.1007/s10645-013-9210-8
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    More about this item

    Keywords

    Financial incentives; School dropout; Policy evaluation; Local difference-in differences; I21; I28;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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