school attendance raises a student’s test score 0.19 to 0.26 standard deviations. Using district-level access instruments generally results in similar estimated effects, as the
estimated effect ranges from 0.17 to 0.31. The similarity of the magnitudes of the OLS and the instrumental variable estimates suggest that in total, the endogeneity bias
resulting from parent’s choice of school type does not invalidate the qualitative con- clusions drawn from the OLS and fixed-effect estimates. Furthermore, the consistent
finding of a positive public school premium across all estimation strategies is strong evidence that public junior secondary schools, on average, provide superior prepara-
tion for the national exam.
Although the focus has been on test scores, the effect of public school attendance could be extended to additional affects of attending public junior secondary school.
Moreover, these outcomes may provide some insight into the channels through which public school attendance affects test scores. In 1997, the IFLS records the self-
reported amount of hours a person spent studying at home per week during attendance of junior secondary school. Because information on study hours was only collected in
1997, the sample size is limited and results should be interpreted with caution. In an OLS regression, public school attendance is associated with a minor, but statistically
significant, increase of 0.7 hours per week in study time. The estimated magnitude is similar for the fixed effect model, but rises to an unrealistic 9.3 extra study hours in
the IV model, and neither the fixed effect nor the IV coefficient is statistically signif- icant. The results are consistent with public school attendance slightly raising study
hours, but are only suggestive, as the OLS results may reflect the tendency for more motivated students to select public schools.
We also examine the effect of school type on completion of junior secondary school, though there is less variation in this variable, as more than 95 percent of all
students who start junior secondary school complete the third grade in that school level. The effect of public school attendance on probability of completion is not sig-
nificant in any of the samples, and the sign of the effect varies across samples.
VIII. Different Types of Private Schools
We now turn to comparing the average effect of attending different types of private junior secondary schools on test scores. We regressed students’ nor-
malized score on the junior secondary school test on an indicator of school type that distinguishes between public Madrassah, private secular, private Madrassah, private
other Muslim, and non-Muslim religious schools, controlling for the student charac- teristics listed above. Because the type of private school cannot be identified using
the village data from the IFLS or school census data from the Ministry of Education, instruments for this regression were unavailable and only OLS and fixed effects
results are presented. Table 5 presents these results. In the full sample, the disadvan- tage in test scores relative to public school students is one-fourth of a standard devi-
ation for secular private schools and private Muslim schools, about 0.10 standard deviations for private Muslim Madrassahs, and small and not significant for private
other schools. The disadvantage is larger for the junior secondary school and ele- mentary school subsamples. When family-level fixed effects are included for the full
sample, the disadvantage for students in secular and Muslim private schools rises The Journal of Human Resources
546
Newhouse and Beegle
547
slightly, to roughly 0.3 standard deviations. Overall, the results suggest that there are two tiers of schools, with private secular and Muslim schools lagging behind public
schools and other private schools. The effect of school type on test score by gender shows the same pattern as that observed for the pooled sample in Table 5 results not
presented.
Is the positive effect of public schooling stronger for brighter students? Table 6 dis- plays the results from an OLS regression on the full sample in which junior second-
ary school type is interacted with the student’s elementary school test score quintile. For students in the highest quintile, secular and Muslim private schooling is associ-
ated with a −0.40 and a −0.45 reduction test scores, which is statistically significant at the 5 percent level. Meanwhile, for students in the second and lower quartile, the
coefficients on school type are smaller. Some public schools in Indonesia, particularly in urban areas, screen students based on their elementary school test score. The results
suggests that, relative to their privately schooled peers, the brightest public students benefit the most from this sorting, while less intelligent public school students are not
harmed by it.
Finally, we examine a secondary methodological question: How robust is the baseline estimated effect of school type if the measures of elementary school
achievement are excluded from the model? Table 7 shows the public school pre- mium for each sample and methodology, with and without two variables measur-
ing academic perfor-mance in elementary school: the student’s elementary school
Table 5 Effect of school type on test score
OLS OLS Junior
OLS Fixed Effects
Full secondary Elementary
sample sample
sample Full sample
Public Madrassah 0.058
−0.057 −0.127
0.105 0.076
0.081 0.078
0.134 Private
Secular −0.223
−0.235 −0.305
−0.284 0.040
0.051 0.060
0.079 Muslim
−0.254 −0.321
−0.359 −0.295
0.046 0.064
0.081 0.084
Muslim −0.101
−0.237 −0.274
−0.083 Madrassah
0.060 0.065
0.066 0.118
Other −0.038
0.019 −0.010
0.115 0.071
0.096 0.110
0.132 Observations
4,382 2,733
1,948 1,077
R -squared
0.46 0.49
0.52 0.75
Notes: Robust standard errors in parentheses. significant at 5 percent; significant at 1 percent. Regression includes other control variables listed below Table 1.
test score and its square, and whether the student repeated a grade in elementary school. Excluding these elementary school academic performance variables in a
standard OLS regression generally doubles the public school premium. Because elementary school performance is strongly and positively associated with both
public school attendance and subsequent junior secondary school test perfor- mance, its omission creates substantial upward bias in the estimated public school
premium.
IX. Conclusion
