Do Education Vouchers Prevent Dropouts at Private High Schools? Evidence from Japanese Policy Changes

Author Name AKABAYASHI Hideo (Keio University) / ARAKI Hiroko (Keio University, Graduate School )
Creation Date/NO. February 2010 10-J-016
Research Project Empirical Analysis of Japan's Labor Market: Policy Responses to Fertility Decline and Population Aging
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Although education voucher programs for students attending private high schools have existed in Japan for decades, as yet there have been no studies that examine their effectiveness. In this paper, we estimate the programs' preventative effect on dropouts using school-track level (academic or vocational) panel data covering all high schools in northern Japan. Facing increasing dropouts due to financial difficulties, prefectural governments have expanded the scope and amount of their private high school tuition support programs since the late 1990s. We use this variation to identify the effect of tuition support on students' decision to dropout, controlling for initial ability of entering students as well as unobservable school-track effects. We also apply the instrumental variable method to account for the possible endogeneity of policy changes. Our results suggest that increasing tuition support is particularly effective in preventing dropouts of private high school students in nonacademic tracks.

Published: Hideo Akabayashi and Hiroko Araki, 2011. "Do education vouchers prevent dropout at private high schools? Evidence from Japanese policy changes," Journal of the Japanese and International Economies, Vol. 25(3), pp. 183-198