Location choices of Swedish independent schools

Abstract

This paper studies the location decisions of the Swedish privately provided independent schools. It makes use of the great expansion of such schools following the 1992 independent school reform, to study the local determinants of independent school entry. The analysis thus provides evidence on the location choices made by private agents in a mixed market setting. The modifiable areal unit problem is addressed by employing a set of alternative measures for local school markets, constructed from highly detailed geographical data on schools and students. The results suggest that independent schools were more likely to choose locations with a larger share of students with high-educated parents; a higher student population density; and a lower share of students with Swedish-born parents. There is also some evidence that independent schools were less likely to locate in municipalities with a left-wing political majority.