Crowding Out the Shadow : Effect of School Construction on Private Supplementary Education

This paper examines the causal impact of school availability on private tutoring. I use a novel IV strategy and exploit variation across counties in high school construction to separate out the effect of high school construction on private tutoring through changes in availability. I find that an increase in the probability of getting into a public high school is associated with reductions in households’ spending and participation in private tutoring. The effects are strongest for students at elementary schools. The decreases are significant even for households with high socio-economic status