Catholic school effectiveness in Australia: A reassessment using selection on observed and unobserved variables

• The effects of Catholic school attendance are estimated for Australian students.
• We place bounds on the Catholic school treatment effect.
• Positive Catholic school effects are lower than previously found.
• The lower bounds cannot rule out negative Catholic school effects.
• We investigate reasons for the decline in the Catholic school effect in Australia.

This paper provides new estimates of the effect of Catholic school attendance on high school completion and university commencement and completion for Australian students. Without a set of robust instruments to deal with any potential selection bias, we place bounds on the Catholic school effect using the assumption of equality between selection on observables and unobservables. The effect of Catholic school attendance is found to be smaller than previous results and negative treatment effects cannot be ruled out. A number of explanations for the decline in the Catholic school effect are considered. These include resource differences, growth in disadvantaged student enrolments in Catholic schools and changes in the school and university sectors in Australia.