In this article, we demonstrate the size of family background eff ects in various regions of Russia and Estonia, concentrating on urban and rural diff erences, addressing the idea that the family background effect is moderated by school level admission policies. Having common path-dependent educational institutions from the communist period, the countries diff er in both the extensiveness of the welfare state and system level school choice policies. However, we see many commonalities in both systems, especially at the urban school level. The family background eff ect is defi ned as the dependence of student achievement on family background characteristics, such as parental education, income and social status. In operationalising family background, the number of books at home and parental education are used as proxies, and its eff ect is measured as a percentage of the individual level PISA 2012 score. We contribute to the literature by studying school choice, its key characteristics and moderating eff ects by school level admission policy in an urban environment.
The article models the competition of high school graduates for state-financed admission to the prestigious universities and analyze the impact of admission policy design on students’ choice. Under limited supply, the admission is based on the applicants’ rating composed on the basis of the Unified State Exam (USE) results, academic olimpics and other achievements. High school graduates allocate their efforts between specific training for standardized tests and learning. The latter is more efficient in terms of human capital building but less efficient in terms of improving exam scores. The cut-off final score is used to balance demand and supply. By changing the weight of non-exam activities in the final score, universities affect the distribution of effort by high-school graduates. It is shown that the possibility of training-for-exam increases students’ expected exam scores, but does not change the students ranking and does not distort the allocation of students between prestigious universities and other higher education institutions. It results however in substitution of learning for training that deteriorates human capital and worsens the quality of enrolment. The optimal design of admission policy in presence of training-for-exam should place higher weight to the academic olimpics and other non-exam achievements. At the national level, the frequent changes in the content and the format of USE tests could be used as a partial remedy