Parental Pressure and Private School Competition: An Empirical Analysis of the Determinants of Public School Quality

In the light of policy interest in measures to improve public school performance, this paper studies the e ects of collective parental pressure and competition from private schools on public school quality. It sets out a new empirical model for understanding school quality determination which makes explicit the inter-connections among public school quality setting, parental pressure, and private school competition. Estimates of the model using an extensive new data set provide the rst empirical evidence on the relative impacts of competition and parental pressure on school quality, and on the strength of interactions between them in the education production process. The ndings indicate that once the decision of parents to become involved in school a airs is endogenized, parental pressure has a positive and signi cant e ect on public school quality. In contrast, greater private school competition has a negative or insigni cant direct impact on public school performance across a wide variety of speci cations, a nding which undermines the view that positive productivity e ects of competition will necessarily prevail. The paper also provides some evidence that parental pressure and competition are substitutes in the production of school quality, identifying a new channel through which competition a ects public school performance.