Parental choice, neighbourhood segregation or cream skimming? An analysis of school segregation after a generalized choice reform

Abstract

This paper studies the evolution of school segregation in Sweden in the aftermath of the 1992 universal voucher reform, which spurred the establishment of new independent schools and introduced parental choice. We assess the relative importance of neighbourhood segregation, parental choice and the location of independent schools for school segregation. In particular, we exploit variation in school choice opportunities across municipalities and provide descriptive evidence that in regions where school choice has become more prevalent, school segregation between immigrants and natives, and between children of high/low educated parents, has increased more than in regions where choice is limited. This result also holds when we account for residential segregation and focus on excess segregation over and above the segregation that would occur if all pupils attended their assigned schools. We find that the increase in school segregation 15 years after the reform that can be attributed to choice is relatively small.