Impact of the Simultaneous Use of the Stigmatization and Categorical School Funding Policy on the Test and Post-Secondary Outcomes of Lower-Achieving Students

This study analyzes the impact of one type of school-based accountability system―the simultaneous use of stigmatization and categorical school funding―on test scores and postsecondary outcomes. We conduct randomization inference in the context of regression discontinuity design by exploiting the discontinuous rule used in the accountability system in South Korea. The results show that the joint use of stigmatization and funding leads to a statistically and practically significant increase in test scores (7, 6, and 5 percentile points for reading, math, and English, respectively). Subgroup analyses by urban or rural areas show that the policy leads to a practically but not statistically significant increase in the share of students taking college entrance exams (4 percentage points) and a practically and statistically significant increase in the share of students matriculating into four-year colleges (9 percentage points) only for schools located in rural areas. We do not find any practically and statistically significant increase in the post-secondary outcomes for schools located in urban areas.