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“Cramming” Before the Exam: Estimating the Causal Effect Of \Cramming" Before the Exam: Estimating the Causal Effect of Exam Preparatory Programs in a Non-randomized Study Ming-sen Wang Department of Economics University of Arizona∗y May 04, 2012 FIRST DRAFT: January 12, 2012 Abstract In this empirical paper, I estimate the impact of attending exam preparatory pro- grams, in particular \cram schools," on students' academic performance. I measure the outcome by admission to a public high school and an \elite" high school. Fo- cusing on the problem that students are not randomly assigned to \cram schools," I approach the issue using propensity score matching and a Bayesian simultaneous- equations model. Using data from a survey of Taiwanese junior high school students in the Taiwan Youth Project, I find evidence that there is an insignificantly negative ∗I am indebted for continuous guidance of Ronald Oaxaca and helpful comments and suggestions from Katherine Barnes, Price Fishback, Keisuke Hirano, and Tiemen Woutersen. I have benefited from discussions with Mario Samano-Sanchez, Sandeep Shetty, and Ju-Chun Yen. All the remaining errors are of my own. E-mail: [email protected]; the latest version of the paper can be found at: http://www.u.arizona.edu/∼mswang. yData analyzed in this paper were collected by the research project Taiwan Youth Project sponsored by the Academia Sinica ( AS-93-TP-C01). This research project was carried out by Institute of Sociology, Academia Sinica, and directed by Chin-Chun Yi. The Center for Survey Research of Academia Sinica is responsible for the data distribution. The authors appreciate the assistance in providing data by the institutes and individuals aforementioned. The views expressed herein are the authors' own. 1 sorting into exam preparatory programs and attending an exam preparatory program improves a student's possibility of being admitted to a public high school or an \elite" high school. Both approaches indicate similar positive treatment effects. 1 Introduction In many East Asian countries, such as Taiwan and Japan, attendance of the so-called \cram school" is prevalent. A \cram school" is a type of shadow education that is aimed at improving a student's exam writing skills. Attending \cram school" imposes additional burdens on a student and her family. It puts additional stress on a student since it requires time and effort. It puts financial loads on parents because sending a child to a program for a month can cost more than tuition fees for a semester in a public school. Given the prevalence and important role of exam preparatory programs in the education system, it is surprising that there are few rigorous evaluations. One problem is that students often self-select into these prep-programs.(Jackson(2012)[33]) As shown in Figure (1), the number of \cram schools" in Taiwan grows steadily. However, there has never been a rigorous proof that attending exam prep-program indeed improves students placement of high school. In a seminal paper, Stevenson and Baker (1992)[47] point out possible factors that foster \cram schools": (1) the use of a centrally administered examination, (2) the use of \con- test rules" instead of \sponsorship rules", and (3) tight linkages between the outcomes of educational allocation in elementary and secondary schooling and future educational oppor- tunities. Taiwanese society has all these factors. Graduates of an \elite" university in Taiwan have significant advantages in the labor market (Lin (1983) [36])1. A student's performance in the Joint High-school Entrance Exam and the Joint College Entrance Exam is strongly linked to future opportunities. It causes a prevalence of \cram schools" in Taiwan and makes Taiwan an ideal candidate to study. The paper distinguishes itself from previous work in two ways (See Stevenson and Baker (1992)[47] and Lin et al.(2006)[37]). Firstly,while other literatures define exam performances as outcome, I focus on admission to public high school and \elite" high school as outcome of interest to avoid selection issue related to taking the Joint Entrance Exam. Since Taiwan has undergone a significant education reform lately as we will discuss in the next section, focusing on admission circumvents complication of modeling and necessity of exclusion restrictions. 1Notice this result can hardly be interpreted as causal since the research does not control for the selection that the graduates of an\elite" university in Taiwan is productive to begin with. 2 Besides, I estimate the effect of \cramming" using a dataset of junior high school students while previous work uses sample from high school students. The difference is meaningful in the sense that senior high school is an important stage of educational stratification in Taiwan. Whether attending prep-programs affects teenagers' life trajectory to academic track or vocational track is an interesting question per se. I compare estimates from propensity score matching and a Bayesian simultaneous-equations model. Identification of the two approaches comes from different untestable assumptions: propensity score matching relies on conditional independence assumption (Rosenbaum and Rubin(1983)[43]) while the Bayesian model relies on exogeneity of the exclusion restrictions. Both approaches differ slightly in the interpretation of the estimate but indicate positive effects of attending \cram school" on admission to public high school or \elite" high school. 2500 2000 county Taipei City 1500 Taipei County Yilan County 1000 Number of Tutoring Schools Number of Tutoring 500 2002 2004 2006 2008 2010 year Figure 1: Growth in Number of Tutoring Schools in Taiwan (2002 - 2010) y Data of this bar chart comes from http://ap4.kh.edu.tw/. The database is maintained by the Education Bureau of Kaohsiung City Government. The database has county-level statistics for all cram schools and after-school tutoring in Taiwan. The figure shows the number of tutoring schools in the 3 countries under study increase over time from 2002 to 2010. 3 1.1 Institutional Backgrounds In 1987, Taiwan ended the martial law that has been in effect since 1949. Along with the freer and more opener political atmosphere, many civil groups started to request reforms in the education system. One of the most significant changes was to replace the old Joint Exam System with the new Multi-Opportunities System. In the old system, every junior high graduate had to attend the Joint High-school Entrance Exam that took place in the summer after the graduation. Students were ranked based on their exam grades. The ranking determined their priorities to choose an academic high school or a vocational high school. Their performance on the Joint High-school Entrance Exam determined their high school. The Exam decided the educational stratification. In 2001, the Ministry of Education officially executed the new Multi-Opportunities Sys- tem. The main idea of the new system is to separate admissions from exams. Two joint exams, the Basic Scholastic Ability Test and the Joint High-school Entrance Exam, are held in a school year to provide students one more chance. Under the new system, students can be admitted to high schools through multiple channels, such as (1) the Joint Entrance Exam, (2) the Special Admission Quotas for Recommended Students, and (3) Other Chan- nels without Entrance Exam Grades. Even though using grades of the Joint Entrance Exam as outcome provides a universal measurement, it involves complication to handle selection to take the Exam. Defining admission as outcome very much simplifies the modeling. 1.2 Literature Review Human capital investment has been a research focus ever since Becker(1962)[7]'s first rigorous treatment on the topic. A large literature is dedicated to estimating the returns of the formal schooling.(See Ashenfelter and Krueger (1994)[6]; Card (1995)[11]; Card(2001)[12]; Belzil(2007)[10]) Regan et al.(2007)[41], on the other hand, focuses on the optimal level of stopping schooling instead of estimating the rate of returns. On the other hand, if a prep-program does not directly increase human capital and it only affects a student's exam performance, the program can be considered as a way to reduce high school costs. It is of particular interest to investigate whether \cram school" increases the likelihood of being admitted to public high school. Admission to an \elite" high school increases the likelihood of being admitted to a better public university2. Again, tuition fees 2Since Taiwanese government subsidizes higher education heavily, public universities in general are ranked as better universities. 4 in a public university are significantly lower than in a private university. Lower tuition fees affect a student's decision of stopping schooling. As pointed out in Jackson(2010)[32],we can motivate the question in the context of the Becker{Willis-Rosen life cycle model of human capital investment (See Becker(1993)[9] and Willis and Rosen (1979)[52]). Suppose the log of earnings y is an increasing concave function of the years of schooling s: y = eg(s) Individuals pay a cost c to attend school, and δ is the discount rate. Then in the Becker- Rosen framework, a student who considers two levels of schooling chooses T years over no schooling if: Z 1 Z T Z 1 V (T ) ≥ V (0) = eg(T )e−δtdt − ce−δtdt ≥ eg(0)e−δtdt T 0 0 If c is lowered by the decision to attend a \cram school", then a student's utility when she acquires more education increases. A student will more likely acquire more education and postpone termination of schooling. If prep-programs have no effect or negative effects on placement of high school, then attending the programs is fundamentally a rent-seeking behavior.(See Krueger(1974)[34]) The motivation to send a teenager to \cram school" is affected by some behavioral factors, say unrealistic concerns that their children will be left behind if all other children go to \cram school." Jackson(2010)[32] is the most similar study using a U.S.
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