DP4052 Immigrating to Opportunity: Estimating the Effect of School Quality Using a Natural Experiment on Ethiopians in Israel

Author(s): Eric D. Gould , Victor Lavy , M. Daniele Paserman

Publication Date: September 2003

Keyword(s): school quality , natural experiment , peer effects , dropout rates , immigrant absorption

JEL(s): I20 , J24

Programme Areas: Labour Economics , Public Policy

Link to this Page: www.cepr.org/pubs/dps/DP4052.asp

In May 1991, 15,000 Ethiopian Jews were brought to Israel in an overnight airlift and sorted in a haphazard and essentially random fashion to absorption centres across the country. This quasi-random assignment produced a natural experiment whereby the initial schooling environment of Ethiopian children can be considered exogenous to their family background and parental decisions. We examine the extent to which the initial elementary school environment affected the high school outcomes of Ethiopian children, using administrative panel data on the educational career of each child in Israel through much of the 1990s. The results show that the early school environment has an important effect on high school dropout and repetition rates and on end-of-high-school matriculation exams. The results are robust to controlling for observable characteristics of the community, suggesting that characteristics of the elementary school itself, such as the quality of instruction and peer effects, are important for high school success.