Current Issue: Volume 12, Issue 3 - Summer 2017

Education Finance and Policy - Volume 12, Issue 3 - Summer 2017

ACT for All: The Effect of Mandatory College Entrance Exams on Postsecondary Attainment and Choice. Joshua Hyman. Education Finance and Policy Summer 2017, Vol. 12, No. 3, pp. 281–311.

This paper examines the effects of requiring and paying for all public high school students to take a college entrance exam, a policy adopted by eleven states since 2001. I show that prior to the policy, for every ten poor students who score college-ready on the ACT or SAT, there are an additional five poor students who would score college-ready but who take neither exam. I use a difference-in-differences strategy to estimate the effects of the policy on postsecondary attainment and find small increases in enrollment at four-year institutions. The effects are concentrated among students less likely to take a college entrance exam in the absence of the policy and students in the poorest high schools. The students induced by the policy to enroll persist through college at approximately the same rate as their inframarginal peers. I calculate that the policy is more cost-effective than traditional student aid at boosting postsecondary attainment.

Don't Hold Back? The Effect of Grade Retention on Student Achievement. Ron Diris. Education Finance and Policy Summer 2017, Vol. 12, No. 3, pp. 312–341.

This study analyzes the effect of age-based retention on school achievement at different stages of education. I estimate an instrumental variable model, using the predicted probability of retention given month of birth as an instrument, while simultaneously accounting for the effect of month of birth on maturity at the time of testing. The analysis further assesses heterogeneity in retention effects by achievement, by background characteristics, and by type of skill. Using international data from multiple waves of the PISA international assessment test, I find that grade retention in primary school harms student achievement across the distribution, while delayed school entry can produce positive results for those at the lower end. The identified local average treatment effect indicates that letting students retain in primary school because of a low relative age is harmful for their future school achievement.


SMART Money: Do Financial Incentives Encourage College Students to Study Science? Brent J. Evans. Education Finance and Policy Summer 2017, Vol. 12, No. 3, pp. 342–368.

Increasing the number of science, technology, engineering, and mathematics (STEM) degrees is a major federal education priority. I investigate whether providing a $4,000 financial incentive to low-income students in their junior and senior years of college induces them to major in a STEM field. Using administrative data from Ohio public colleges, I exploit a discontinuity in income eligibility for the National SMART Grant on the pursuit of science majors. Regression discontinuity results indicate financial incentives do not encourage students at the threshold of eligibility to choose STEM majors in their junior year. The null findings are fairly precise, ruling out modest, policy relevant effects for students near the Pell Grant eligibility threshold. I examine several potential explanations of this null result and argue that federal policy makers could improve the design of the program by creating the financial incentive earlier in students’ educational careers.

Assessing Principals’ Assessments: Subjective Evaluations of Teacher Effectiveness in Low- and High-Stakes Environments. Jason A. Grissom, and Susanna Loeb. Education Finance and Policy Summer 2017, Vol. 12, No. 3, pp. 369–395.

Teacher effectiveness varies substantially, yet principals’ evaluations of teachers often fail to differentiate performance among teachers. We offer new evidence on principals’ subjective evaluations of their teachers’ effectiveness using two sources of data from a large, urban district: principals’ high-stakes personnel evaluations of teachers, and their low-stakes assessments of a subsample of those teachers provided to the researchers. We find that principals’ evaluations of teachers are quite positive whether the stakes are high or low, but the low-stakes evaluations show substantially more use of lower rating categories, and many teachers rated ineffective on the low-stakes assessment receive “effective” or “highly effective” high-stakes ratings. Teacher characteristics, such as experience, partially explain the discrepancy between the two scores. Also, despite the fact that principals overwhelmingly assign teachers to the two highest rating categories on the high-stakes evaluation, their high- and low-stakes ratings show similar correlations with teacher value-added measures.

Teacher Quality and Teacher Mobility. Li Feng, and Tim R. Sass. Education Finance and Policy Summer 2017, Vol. 12, No. 3, pp. 396–418.

There is growing concern among policy makers over the quality of the teacher workforce in general, and the distribution of effective teachers across schools. The impact of teacher attrition on overall teacher quality will depend on the effectiveness of teachers who leave the profession. Likewise, teacher turnover may alleviate or worsen inequities in the distribution of teachers, depending on which teachers change schools or leave teaching and who replaces them. Using matched student–teacher panel data from the state of Florida, we examine teacher mobility across the distribution of effectiveness (as measured by teacher value added). We find that top-quartile and bottom-quartile teachers exit at a higher rate than do average-quality teachers. Additionally, as the share of peer teachers with more experience, advanced degrees, or professional certification increases, the likelihood of moving within-district decreases. We also find some evidence of assortative matching among teachers—more productive reading/language arts teachers are more likely to stay in teaching if they have more productive peer teachers.

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