Does Greater School Autonomy Make a Difference? Evidence from a Randomized Natural Experiment in South Korea

We exploit the unique features of high schools in Seoul to study the effects of school autonomy on student outcomes. Under South Korea's equalization policy, both private and public schools in Seoul admit students that are assigned randomly to them, receive equal government funding, charge identical fees, and use similar curricula. However, private schools have greater flexibility in personnel decisions, and their principals and teachers face stronger incentives to perform. We find that private high schools have better student outcomes than public high schools. Our results suggest that autonomy in personnel decisions explains the positive student outcomes in private schools.1