WORKING PAPER SERIES

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1 Introduction

The eciency (i.e., the degree to which inputs can be converted to outputs

as compared to best practice) of education has long been of interest to policymakers,

educators and parents worldwide. In Australia, the debate about school

eciency has intensied in recent years. In 2008, all Australian Education Ministers

released the Melbourne Declaration on Educational Goals for Young Australians,

setting out the future directions for Australian schooling in the next 10

years (MCEERYA, 2008). To support the Melbourne Declaration, a series of action

plans including curriculum designs, school assessments and nancing have

been proposed and implemented. One of the major reforms that was instituted

was the introduction of a National Assessment ProgramLiteracy and Numeracy

(NAPLAN) in 2008. The NAPLAN was initiated to provide a rigorous and

comprehensive assessment of student progress across Australia. To strengthen

accountability and transparency of schooling, test results are then made available

to the public via a website called My School (www.myschool.edu.au).

In this paper, we take advantage of the availability of the test results to

produce econometrically-robust estimates of school performance. We do so by

examining the eciency of almost all Australian schools and by investigating the

variations in input combinations and environmental factors that aect the level

of eciency achieved by schools. As far as we are aware, Haug and Blackburn

(2013) is the sole existing study that uses test scores to examine the eciency of

public secondary schools, and it does so only for the State of New South Wales

(NSW).

Our study extends previous work along several dimensions. First, we apply

the value-added approach to measure the school output as the gain in test

scores of the same students, and hence are able to address the selection bias

issue at the student level.

Second, we examine the eciency of virtually all

mainstream schools in Australia. 1 Third, unlike previous work that has focused

on public schools, this study examines both on public and non-public schools

and distinguishes between Catholic and independent schools. Fourth, while this

previous study examined the eciency of secondary schools we also investigate

the eciency of primary schools.

2 Literature review

The literature on school performance is vast, so our review focuses strictly

on studies that are relevant to eciency measurement of schools. The review

includes two parts: namely, international literature and Australian literature.

Our discussion of the international literature focuses on the variety of methodologies

that have been used, while our discussion of the Australian literature is

more detailed due to the relative smaller number of studies on school eciency.

1 We exclude special schools that educate children with disabilities and distance education

schools from the study for reasons that are provided below.

2

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