Do Single-Sex School Advantages Exist? Evidence from a School Choice Lottery Program in Seoul* Jungmin Lee Yoonsoo Park Seoul National University & IZA Korea Development Institute May 2017 Abstract We investigate the hypothesis of single-sex school advantages. Do students perform academically better in schools segregated by sex? Using Korean longitudinal data tracking individual students for 6 years from middle to high schools, we identify the types of students who prefer single-sex schools and their middle-school, individual, and household characteristics. Utilizing information on high schools they applied for in the school choice lottery system, we estimate the effects of single-sex school attendance on high-school test scores. We find little single-sex school advantages, after controlling for the gender types of the schools for which students applied. That is, the observed single-sex school advantages are mainly driven by students’ self- selection. Then, the prevailing preference for single-sex schools among parents is puzzling, for which we attempt to find some possible explanations. Keywords: single-sex schooling, school choice lotteries, academic performance, preferences for single-sex schools. JEL codes: I21, I28. * We would like to thank seminar participants at Yonsei University, Korea Academic Society of Industrial Organization, Korean Association of Applied Economics, and SNU Research in Economics Workshop. Lee’s work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korean (NRF-2016S1A5A01025292). 1 I. Introduction It is well known that students are affected by their peers in many regards. There has been an increasing amount of empirical evidence that many student outcomes, which are of importance to policy makers as well as parents, such as students’ academic performance and behavioral problems, are influenced by surrounding peers’ behaviors, their academic performance, individual characteristics and family background. Among others, whether the gender composition of school peers matters has been studied intensively, for an obvious reason that single-sex and coeducational schools coexist and the gender type of schools is a policy variable. In particular, in the U.S., the question—whether students in single-sex schools outperform than those in coeducational schools—has received much attention in academia around the recent policy change, which relaxed the Title IX’s prohibition of sex-based discrimination and, albeit to a limited extent, allowed for single-sex education. The rationale behind this notable change is the belief that single- sex education is beneficial to students, especially in terms of academic performance. There might be various mechanisms for the “single-sex education advantage”; students of different genders have different learning styles, teachers may teach more effectively when their students are of a single gender, students might be less disruptive in single-sex classes, and so on. It is noteworthy in the literature on the single-sex school advantage that many recent studies have looked at the case of Korea (Park, Behrman, and Choi 2012; 2013; Choi, Moon, and Ridder 2014; Ku and Kwak 2013; Sohn 2016; Park 2017). The reason is not only that education is seriously taken by parents and students in Korea, but also that the Korean education institution provides a unique experimental setting for identifying the causal effect of single-sex school attendance. In Korea, under the so-called equalization policy, schools in metropolitan areas are equalized in terms of crucial school inputs including budgets, curriculum, and teacher quality, while students are randomly assigned to schools within school districts. Furthermore, students’ school transfers are not allowed within districts. Since some schools are single-sex ones and others are coeducational within districts, if students are indeed randomly assigned to schools within districts, then it is possible to estimate the causal effect of single-sex school attendance by a simple regression model with school-district fixed effects.1 In fact, all the above-mentioned studies of the Korean case relied upon the within-district random assignment for causal identification. While there are some subtle 1 There are a few papers which exploited within-district random assignment under the equalization policy in Korea to investigate other topics than single-sex school advantages. Kang (2007) estimated academic peer effects. Hahn, Wang, and Yang (2013) examined the effects of school autonomy and accountability on student performance. Both studies rely on random assignment of students to schools for causal identification. A bit differently, Kim, Lee, and Lee (2008) analyzed the effects of sorting and mixing on high-school students’ test scores by using regional variation in the adoption of the equalization policy. 1 differences among those studies, all of them found some positive evidence for single-sex school advantages. However, some concerns have been raised over the validity of the within-district random assignment assumption and the results that are based on the assumption. Lee and Kang (2015) argue that the within-district random assignment policy was rapidly eroded since the 1990s and hence a causal inference based on the within-district random assignment rule may not be valid for the data collected after the period. Han and Ryu (2016) studied high school assignment in Seoul during the early 2000s and concluded that it is essentially a distance-based rule rather than the within-district random assignment rule, although the detailed assignment rule is kept confidential. Kim and Kim (2015) argued more directly that the within-district random assignment rule in Seoul was performed only within 30-minutes commutable areas using public transportation and thus the positive single-sex schooling effect reported in the literature may be spurious. 2 Sohn (2016) found a positive within-district correlation between single-sex school attendance and academic achievement in Seoul, but when controlling for residential location of students more narrowly than school districts, the observed single-sex school premium became negligible. He interpreted these results as suggesting that there is endogenous sorting of students. To the extent that the validity of the within-district random assignment is limited, the substantial single-sex school effects reported in the previous studies may be due to spurious correlation between single- sex school attendance and unobserved student characteristics. In this paper, we attempt to re-examine the causal effect of single-sex school attendance on academic performance by explicitly controlling for potential unobserved heterogeneity between students who prefer to attend single-sex schools and those who prefer to attend coeducational schools. Specifically, we exploit a school choice lottery program – the High School Choice Program (hereafter, the Seoul lottery system) - introduced in Seoul, the capital of Korea, in 2010. An important feature of the Seoul lottery system is that it matches students with schools based on school choices of students, similarly to the Boston mechanism.3 Specifically, each student lists four schools they want to attend in a single application form, and the Seoul Metropolitan Office of Education assigns students to schools based on their choices. This feature of the lottery system allows us to observe students’ revealed preferences for school characteristics and hence estimate the single-sex school premium by explicitly controlling for the gender types of applied schools as covariates.4 2 There are 11 school districts in Seoul. Each school district typically consists of 2-3 administrative districts and 500,000-1,200,000 residents. 3 There have been a number of studies that have theoretically examined the mechanism since the seminal paper by Abdulkadiroğulu and Sönmez (2003). 4 Our empirical strategy is similar to the standard approach in lottery-based studies of school choice in the literature. To name only a few, Rouse (1998), Hoxby and Rockoff (2005), Cullen, Jacob, and Levitt (2006), Hastings, Kane, and Staiger (2008), Hoxby and Murarka (2009), Abdulkadiroŭlu et al. (2011), Deming (2011), Hastings, Neilson, and Zimmerman (2012), and Deming, Hastings, Kane, and Staiger (2014). 2 We apply this empirical strategy to longitudinal data that track students over six years from their 7th grade (first year in middle school) to 12th grade (third year in high school). The longitudinal feature of the data allows us to test our identification assumption by measuring correlations between single-sex school assignment and a variety of predetermined characteristics including middle-school test scores, which could not be attempted in the previous studies where the information on predetermined academic outcomes were unavailable in cross-sectional data. To summarize our results, we find that the simple OLS estimates without controlling for the gender types of applied schools yield substantial single-sex schooling advantages, even if we control for a rich set of student characteristics as well as school-district fixed effects, the latter being the key control in the previous studies. However, when we control for unobserved heterogeneity across students by controlling for the gender types of their applied schools, the estimated impact of single- sex school attendance become negligible. These results suggest that the substantial single-sex school premiums reported in the previous studies