Published in: Review of Economics and Statistics 89 (4). (2007). 721-736. (with Edwin Leuven and Mikael Lindahl and Dinand Webbink)
This paper evaluates the effects of two subsidy schemes targeted at disadvantaged students in the Netherlands. The first scheme gives schools with at least 70 percent minority students extra funding for personnel. The second scheme gives schools with at least 70 percent students from different disadvantaged groups extra funding for computers and for language materials. The cutoffs at 70 percent provide a regression discontinuity design which we exploit in an instrumental variables framework. Estimates of the effects of the Personnel Subsidy on achievement of 8th graders in language, math and information processing are positive but never significantly different from zero. Estimates of the effects of the Computer Subsidy on the same outcome variables are negative and in some cases significantly different from zero.