Fundamental Determinants of School Efficiency and Equity: German States as a Microcosm for OECD Countries

Abstract

Cross-country evidence on student achievement might be hampered by omitted country characteristics such as language or legal differences. This paper uses cross-state variation in Germany, whose sixteen states share the same language and legal system, but pursue different education policies. The same results found previously across countries hold within Germany: Higher mean student performance is associated with central exams, private school operation, and socio-economic background, but not with spending, while higher equality of opportunity is associated with reduced tracking. In a model that pools German states with OECD countries, these fundamental determinants do not differ significantly between the two samples.

Keywords: student performance, PISA, Germany, education production function, institutional effects in schooling

JEL Classification: I28, L38, L33, H52, D02, D63, J24