Competition and quality in Dutch primary schools

We investigate the impact of competition between primary schools on the quality of education. Do schools facing more competition in their neighbourhood perform better than schools facing less competition? As a main measure of school quality, we look at the performance of pupils at the Cito-test. Due to potential endogenous school location and pupil sorting, we adopt an instrumental variable strategy (IV) in the spirit of Gibbons et al. (2008). Using a large range of data on pupil, school and market characteristics, our results suggest that school competition has a positive effect on pupil achievement measured by the Cito-test.