Is a Better School Better for All? Evidence from Elite Education in China

A large and growing literature focuses on the causal impacts of elite education on students’ academic outcomes. Yet, current conclusions are contentious. To understand the heterogeneous impacts of elite education, this study proposes a conceptual framework with individual heterogeneity in academic preparation and comparative advantages of schools among different instructional methods. Using a novel data set combining students’ performance on middle school final exams, the High School Entrance Exam (HEE), and the College Entrance Exam (CEE) in China, this study provides direct evidence that well-prepared students benefit from elite high school education more than ill-prepared students, whose performance on the CEE can even be hurt by elite high school education. The empirical results are consistent with our theoretical predictions. Also, high-stakes exam results depend highly on one’s unobserved ability to handle such exams. Using high-stakes exam results to allocate educational resources masks students’ actual preparation for elite education, resulting in a misallocation of educational resources