The impact of 'equal educational opportunity' funds: a regression discontinuity design.

Many countries provide extra resources to schools serving disadvantaged pupils. We exploit a discontinuity in the assignment of such personnel subsidies in Flanders to estimate the impact on cognitive outcomes via a regression discontinuity (RD) design. Because bias can be substantial in RD designs, we include a bias correction in the specification of the control function. Overall, we find positive effects for mathematics, reading and spelling, but the impact is significant for spelling only. The effects are larger for disadvantaged pupils defined on the basis of family background, smaller - or less reliable - for low initial performers, and again larger at schools that used the resources to foster socio-emotional development.

The impact of 'equal educational opportunity' funds: a regression discontinuity design

Many countries provide extra resources to schools serving disadvantaged pupils. We exploit a discontinuity in the assignment of such personnel subsidies in Flanders to estimate the impact on cognitive outcomes via a regression discontinuity (RD) design. Because bias can be substantial in RD designs, we include a bias correction in the specification of the control function. Overall, we find positive effects for mathematics, reading and spelling, but the impact is significant for spelling only. The effects are larger for disadvantaged pupils defined on the basis of family background, smaller - or less reliable - for low initial performers, and again larger at schools that used the resources to foster socio-emotional development.

Bounded Sequential Dominance Criteria

In the spirit of Fleurbaey et al. (2001), it is tempting to introduce more reasonable lower and upper bounds in Atkinson and Bourguigon’s (1987) sequential generalized Lorenz dominance procedure. Unfortunately, our proposal leads, at best, to an average household income criterion, which is unsuited to make heterogeneous welfare comparisons. We therefore restrict attention to imposing either lower or upper bounds, resulting in two new sequential dominance criteria.

The Impact of 'Equal Educational Opportunity' Funds: A Regression Discontinuity Design

Many countries provide extra resources to schools serving disadvantaged pupils. We exploit a discontinuity in the assignment of such personnel subsidies in Flanders to estimate the impact on cognitive outcomes via a regression discontinuity (RD) design. Because bias can be substantial in RD designs, we include a bias correction in the specification of the control function. Overall, we find positive effects for mathematics, reading and spelling, but the impact is significant for spelling only. The effects are larger for disadvantaged pupils defined on the basis of family background, smaller – or less reliable – for low initial performers, and again larger at schools that used the resources to foster socio-emotional development.impact evaluation, disadvantaged students, school resources

Partial compensation/responsibility

Compensation/responsibility theory requires that differences in individual outcomes which can be fully attributed to differences in underlying ‘compensation’ factors should be eliminated, while differences in outcomes caused by differential ‘responsibility’ factors should be preserved. To implement the theory, a ‘sharp’ cut between compensation and responsibility factors has to be made, which is often difficult in practice. In this note, we introduce a more .flexible ‘soft’ cut. - Based on a notion of partial compensation/responsibility - into a first-best income tax model à la Bossert (1995) and Bossert and Fleurbaey (1996). Two results emerge. First, we show that this ‘soft’ cut does not allow to escape the Bossert-Fleurbaey separability requirement of the gross income function. Second, we characterize a partial sharing rule-cum-separability as a natural candidate for partial redistribution.

Is ELIE a wasteful minimum income scheme?.

ELIE can be interpreted as a minimum income scheme, financed by lump-sum taxes. It may induce social waste as individuals with a low taste for working may opt for voluntary unemployment. We simulate the magnitude of this social waste with microdata for Belgium and compare ELIE with a firstbest scheme and a second-best scheme (based on a linear income tax), implementing the same minimum income. As expected, the social waste induced by ELIE is intermediate between the social waste induced by the first- and second-best schemes. Assumptions about the preferences of the voluntarily unemployed play a crucial role.

Non-welfare economics and the well-being of phantom agents: an appeal to caution

Besley (1988) is one of the few exceptional articles containing non-welfarist optimal tax devices. Feehan(1990) reports an error in his first-best rules. The present note criticizes the fundamentals of Besley's second-best rules. These rules optimize the welfare or well-being of phantom agents rather than the corrected welfare of real existing agents in society.

School accountability: (how) can we reward schools and avoid cream-skimming?

Introducing school accountability may create incentives for efficiency. However, if the performance measure used does not correct for pupil characteristics, it will lead to an inequitable treatment of schools and create perverse incentives for cream-skimming. We apply the theory of fair allocation to show how to integrate empirical information about the educational production function in a coherent theoretical framework. The requirements of rewarding performance and correcting for pupil characteristics are incompatible if we want the funding scheme to be applicable for all educational production functions. However, we characterize an attractive subsidy scheme under specific restrictions on the educational production function. This subsidy scheme uses only information which can be controlled easily by the regulator. We show with Flemish data how the proposed funding scheme can be implemented. Correcting for pupil characteristics has a strong impact on the subsidies (and on the underlying performance ranking) of schools.

Fair and Efficient Taxation under Partial Control: Theory and Evidence

There is clear evidence that fairness plays a role in redistribution. Individuals want to compensate others for their misfortune, while they allow them to enjoy the fruits of their effort. Such fairness considerations have been introduced in political economy and optimal income tax models with a focus on income acquisition. However, actual tax-benefit systems are based on much more information. We introduce fairness in a tax-benefit scheme that is based on several characteristics. The novelty is the introduction of partial control. Each characteristic differs in terms of the degree of control, i.e., the extent to which it can be changed by exerting effort. Two testable predictions result. First, the tax rate on partially controllable characteristics should be lower compared to the tax rate on non-controllable tags. Second, the total effect of non-controllable characteristics on the post-tax outcome should be equal to zero. We estimate implicit tax rates for different characteristics in 26 European countries (using tEU-SILC data) and the US (using CPS data). We find a robust tendency in all countries to compensate more for the uncontrollable composite characteristic (based on sex, age and disability in our study) compared to the partially controllable one (based on family composition, immigration status, unemployment and education level). We also estimate the degree of fairness of tax-benefit schemes in different countries. Only the Continental countries France and Luxembourg pass the fairness test, whereas the Baltic and Anglo-Saxon countries (including the US) perform worst.fairness, redistribution, tax-benefit schemes, tagging, optimal taxation

Wage policies, employment, and redistributive efficiency

I analyze whether wage policies -like minimum wages and wage subsidies- can add value to an optimal non-linear earnings tax scheme in a perfectly competitive labour market. Jobs in the labour market differ along two margins: intensity (labour effort) and duration (labour hours). Three key results follow. First, even though minimum wages destroy low performance jobs, they increase employment if the minimum wage is binding, but not too high. Second, minimum wages -and wage and labour controls more generally- can enhance redistributive efficiency. The underlying mechanism is their potential to deter mimicking and thus to relax the self-selection constraints in the optimal income tax problem. Third, wage and labour controls become superfluous if a wage-contingent earnings tax scheme –a tax scheme that depends nonlinearly on earnings and wages- can be optimally set. Instead, wage and labour subsidies can be optimal in a wage-contingent tax scheme