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Halsey Rogers, DECRG Public-Private Partnership Conference, June 2007

Comments on “Does Money Matter? The Effect of Private Educational Expenditures on Academic Performance”, by Changhui Kang. Halsey Rogers, DECRG Public-Private Partnership Conference, June 2007. Overview. Value of this paper Econometric and data issues Interpreting the findings

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Halsey Rogers, DECRG Public-Private Partnership Conference, June 2007

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  1. Comments on “Does Money Matter? The Effect of Private Educational Expenditures on Academic Performance”, by Changhui Kang Halsey Rogers, DECRG Public-Private Partnership Conference, June 2007

  2. Overview • Value of this paper • Econometric and data issues • Interpreting the findings • Does private tutoring not matter? • Why do households invest so much in tutoring?

  3. Value of this paper • Private tutoring has received too little study • Major feature of education systems, in East Asia especially • Tutoring is quantitatively very important • Tutoring choices provide insight into the educational objectives of households • Paper uses an appropriate empirical framework • Good data -- detailed student information linked to college entrance exam scores • Uses IV to try to get around problem of endogeneity of tutoring expenditures • Recognizes that parents may invest disproportionately in either high- or low-ability children • Tries to control for pre-tutoring performance, by collecting retrospective information on students’ Grade 11 ranks • Therefore more likely to be picking up tutoring value-added

  4. Econometric and data-related issues • Appropriateness of the instrument • Does first-child dummy really meet the exclusion restriction? • If not, is it enough that the direct effect on test scores is likely positive? • First-born vs. only-child effect • Run separately (including comparison of means) without the 7% of sample for whom only_child = 1? • Separate instruments for first-born boys and girls • Clarify what we learn from this over-identification test? • Endogeneity of some explanatory variables • Hours_of_self-study is likely endogenous to tutoring decision  exclude? • Dependent variable: Test scores vs. 12th-grade grades/ranking?

  5. Interpreting the findings 1:Should we conclude that private tutoring doesn’t matter? • Magnitude of the tutoring effect • Korean parents spend 85% as much on private tutoring as on public schooling • Total private tutoring expenditures/GDP = ~ 2-3%

  6. Total expenditures From 1998 KEDI Survey on Educational Expenditures

  7. Total expenditures From 1998 KEDI Survey on Educational Expenditures

  8. Private expenditures per student From 1998 KEDI Survey on Educational Expenditures

  9. Private expenditures per student From 1998 KEDI Survey on Educational Expenditures

  10. Interpreting the findings 1:Should we conclude that private tutoring doesn’t matter? • Magnitude of the tutoring effect • Korean parents spend 85% as much on private tutoring as on public schooling • Total private tutoring expenditures/GDP = ~ 2-3% • What this means: • If tutoring increases test scores by roughly as much as public schooling does, and • If test-score gains actually represent increased human capital, then: • Tutoring  ~1/4 of human capital acquired • Rough calculation, but effects are likely still large  money does matter, in an aggregate sense

  11. Interpreting the Findings 2:Why so much investment in tutoring? Some possibilities

  12. Interpreting the Findings 2:Why so much investment in tutoring? Some possibilities

  13. Interpreting the Findings 2:Why so much investment in tutoring? Some possibilities

  14. Interpreting the Findings 2:Why so much investment in tutoring? Some possibilities

  15. Interpreting the Findings 2:Why so much investment in tutoring? Some possibilities

  16. Summary: Kudos, and a few suggestions • Clarify empirical and data issues • Discuss other possible instruments? • Clarify how money matters, rather than whether it does • Explain what might be happening: why the massive investment in tutoring? • Deeper discussion of the context would be helpful to show why the paper’s results are plausible • Draw on work by sociologists, anthropologists, popular media

  17. Comments on “Does Money Matter? The Effect of Private Educational Expenditures on Academic Performance”, by Changhui Kang Halsey Rogers, DECRG Public-Private Partnership Conference, June 2007

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