HKS Faculty Research Working Paper Series
HKS Working Paper No. RWP15-053
September 2015
Abstract
School choice systems aspire to delink residential location and school
assignments by allowing children to apply to schools outside of their
neighborhood. However, the introduction of choice programs affect
incentives to live in certain neighborhoods, which may undermine the goals of
choice programs. We investigate this possibility by developing a model of public
school and residential choice. We consider two variants, one with an exogenous
outside option and one endogenizing the outside option by considering
interactions between two adjacent towns. In both cases, school choice rules
narrow the range between the highest and lowest quality schools compared to
neighborhood assignment rules, and these changes in school quality are
capitalized into equilibrium housing prices. This compressed distribution
generates incentives for both the highest and lowest types to move out of cities
with school choice, typically producing worse outcomes for low types than
neighborhood assignment rules. Paradoxically, even when choice results in
improvement in the worst performing schools, the lowest type residents may
not benefit.
Citation
Avery, Christopher, and Parag A. Pathak. "The Distributional Consequences of Public School Choice." HKS Faculty Research Working Paper Series RWP15-053, September 2015.