School choice and segregation: determinants, effects and policy

We investigate the determinants and effects of school segregation, a socially and economically relevant topic. Not only does social segregation have severe democratic consequences, it also impacts educational outcomes and hampers an efficient allocation and production of human resources. First, we investigate how preferences for socio-economic and ethnic group composition lead to school segregation. We estimate and simulate school choice decisions, with a special focus on the degree of preference heterogeneity across social groups. In a next step, this allows us to decompose school segregation into different factors (such as preferences for school characteristics, neighbourhood composition, and socio-economic composition of the overall population). We show how these factors interact with and reinforce each other. Second, we look at the effect of school composition on educational outcomes as drop-out, grade retention and track choice. We determine the size of this effect and the groups of students most sensitive to it. Combining this with the results on the determinants of segregation, we study the effect of desegregation policies (a change in student assignment rules and policies leading to a decrease in neighbourhood segregation) on school segregation, educational outcomes and welfare.