nep-edu New Economics Papers
on Education
Issue of 2005‒01‒16
twelve papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. The private and fiscal returns to schooling and the effect of public policies on private incentives to invest in education: a general framework and some results for the EU By Angel de la Fuente; Juan Francisco Jimeno
  2. Parametric and semiparametric estimation of sample selection models: an empirical application to the female labour force in Portugal By Danilo Coelho; Helena Veiga; Róbert Veszteg
  3. Birth Spacing and Neonatal Mortality in India: Dynamics, Frailty and Fecundity By Sonia Bhalotra; Arthur van Soest
  4. Risk adjustment in the Netherlands: an analysis of insurers' health care expenditures By Rudy Douven
  5. Does job loss shorten life? By Eliason, Marcus; Storrie, Donald
  6. Pupil Achievement, School Resources and Family Background By Hægeland, Torbjørn; Raaum, Oddbjørn; Salvanes, Kjell G.
  7. Drinking and Academic Performance in High School By Jeff DeSimone; Amy M. Wolaver
  8. Parental Education and Children’s Schooling Outcomes: Is the Effect Nature, Nurture, or Both? Evidence from Recomposed Families in Rwanda By Damien de Walque
  9. The Relative Richness of the Poor? Natural Resources, Human Capital, and Economic Growth By Claudio Bravo-Ortega; Jose de Gregorio
  10. Child Labor, School Attendance, and Indigenous Households: Evidence from Mexico By Rosangela Bando; Luis F. Lopez-Calva; Harry Anthony Patrinos
  11. Self-Selection and Student Achievement By Honggao Cao
  12. Reporting Bias and Heterogeneity in Self-Assessed Health. Evidence from the British Household Panel Survey By Cristina Hernandez-Quevedo; Andrew M Jones; Nigel Rice

  1. By: Angel de la Fuente; Juan Francisco Jimeno
    Abstract: This paper develops a comprehensive framework for the quantitative analysis of the private and fiscal returns to schooling and of the effect of public policies on private incentives to invest in education. This framework is applied to 14 member states of the European Union. For each of these countries, we construct estimates of the private return to an additional year of schooling for an individual of average attainment, taking into account the effects of education on wages and employment probabilities after allowing for academic failure rates, the direct and opportunity costs of schooling, and the impact of personal taxes, social security contributions and unemployment and pension benefits on net incomes. We also construct a set of effective tax and subsidy rates that measure the effects of different public policies on the private returns to education, and measures of the fiscal returns to schooling that capture the long-term effects of a marginal increase in attainment on public finances under c
    Keywords: returns to schooling
    Date: 2004–12–22
  2. By: Danilo Coelho; Helena Veiga; Róbert Veszteg
    Abstract: This comment corrects the errors in the estimation process that appear in Martins (2001). The first error is in the parametric probit estimation, as the previously presented results do not maximize the log-likelihood function. In the global maximum more variables become significant. As for the semiparametric estimation method, the kernel function used in Martins (2001) can take on both positive and negative values, which implies that the participation probability estimates may be outside the interval [0,1]. We have solved the problem by applying local smoothing in the kernel estimation, as suggested by Klein and Spady (1993).
    Keywords: parametric estimation, semiparametric estimation, sample selection model
  3. By: Sonia Bhalotra; Arthur van Soest
    Abstract: A dynamic panel data model of neonatal mortality and birth spacing is analyzed, accounting for causal effects of birth spacing on subsequent mortality and of mortality on the next birth interval, while controlling for unobserved heterogeneity in mortality (frailty) and birth spacing (fecundity). The model is estimated using micro data on about 30000 children of 7000 Indian mothers, for whom a complete retrospective record of fertility and child mortality is available. Information on sterilization is used to identify an equation for completion of family formation that is needed to account for right-censoring in the data. We find clear evidence of frailty, fecundity, and causal effects of birth spacing on mortality and vice versa, but find that birth interval effects can explain only a limited share of the correlation between neonatal mortality of successive children in a family.
    Keywords: fertility, birth spacing, childhood mortality, health, dynamic panel data models, siblings.
    JEL: I12 J13 C33
    Date: 2004–12
  4. By: Rudy Douven
    Abstract: As of 2006, the Dutch healthcare system will be run by regulated competition. An important part of regulated competition is a system of risk adjustment. This paper presents an empirical analysis of the effects of risk adjustment in the Dutch social health insurance system covering the years 1991-2001. By comparing insurers' health care expenditures with their risk adjusted premiums, our analysis estimates the impact of risk adjustment over a number of years. <P> Results indicate that the risk-adjustment system has improved substantially. Whereas in the beginning of the nineties prospective risk adjustment could explain about 20% of the variation in health care expenditure differentials between insurers, this figure rose to 55% in 2001. The explanation of the same variation after retrospective payments did not show a clear upward or downward trend, and has varied since 1995 around 85%. The remaining variation in insurers' health care expenditure differentials are determined more by structural than random factors. One such factor may be related to the low ex-ante projections of the government's total health care expenditures, which favour insurers with a population of relatively good health risks. <P> Results show that new entrants in the Dutch health insurance market had significantly lower health care expenditures. Furthermore, economies of scale do not seem to have played a role during the sample period: the expenditures of large insurers were not significantly lower than those of the smaller insurers.
    Keywords: risk adjustment; health care; health care expenditure; health care insurers; health care insurance
    JEL: I11 I18
    Date: 2004–10
  5. By: Eliason, Marcus (Department of Economics, School of Economics and Commercial Law, Göteborg University); Storrie, Donald (Department of Economics, School of Economics and Commercial Law, Göteborg University)
    Abstract: We examine whether there is a causal relationship from job displacement to mortality. The study is based on employees who lost their job from all establishment closures in 1987 and 1988 in Sweden and, as a control group, a large random sample of employees not experiencing displacement at that time. The registers follow all these individuals, between 1983 and 2000 with minimal attrition. They also provide much relevant information on individual, family and establishment characteristics, and predisplacement health and labor market history. Using propensity score matching, we find higher mortality among the displaced up to the eighth follow-up year, mainly due to suicide and heart diseases. Estimates of all-cause mortality risk show significant effects for displaced men, but not for women, up to nine years after displacement. An important methodological conclusion is that research that focuses only on those who leave late in the closure process may over-state the impact of displacement on mortality. <p>
    Keywords: Plant closure; displaced workers; mortality; propensity score matching
    JEL: I12 J63 J65
    Date: 2004–12–01
  6. By: Hægeland, Torbjørn (Statistics Norway and Ragnar Frisch Centre for Economic Research); Raaum, Oddbjørn (Ragnar Frisch Centre for Economic Research); Salvanes, Kjell G. (Norwegian School of Economics and Business Administration, Statistics Norway and IZA Bonn)
    Abstract: Whether increasing resource use in schools has a positive effect on pupil performance has occupied governments, parents and researchers for decades. A main challenge when trying to answer this question is to separate the effects of school resources from the effects of pupils’ family background, since resources may be allocated in a compensatory manner, and pupils may sort into schools. We address these issues using a comprehensive dataset for two cohorts of pupils graduating from lower secondary school in Norway. The dataset is rich in performance measures, resource use variables and family background variables. As performance measures we use results at age 16 across 11 subjects, and we exploit the fact that we have both information from results from national exams and from continuous assessment in class. Controlling for family background, we find a positive but modest effect of resource quantity such as teacher hours per pupil, on pupil achievement. Observable teacher qualifications, within the variation present in lower secondary school in Norway, do not appear to have significant effects on school results. Resource quality as measured by teacher characteristics does not appear to have a significant impact on pupils’ marks. We find clear evidence of compensating resource allocation and teacher sorting as well as relative setting of marks.
    Keywords: exam results, school resources, family background, compensating resource allocation
    JEL: I2
    Date: 2005–01
  7. By: Jeff DeSimone; Amy M. Wolaver
    Abstract: This paper examines the relationship between drinking and academic performance for high school students in 2001 and 2003 Youth Risk Behavior Survey (YRBS) data. In particular, we attempt to determine the extent to which the observed negative association between alcohol use and grades reflects correlated unobserved factors rather than a true causal impact of drinking. Taking advantage of the abundant information the YRBS collects on behaviors that are potentially related with both drinking and academic performance, we estimate regressions that successively add proxies for risk and time preference, mental health and self-esteem, along with measures of other substances used. Results indicate that although estimated effects of drinking on grades are substantially reduced in magnitude when these additional covariates are included, they typically remain significantly negative. The impact on the extensive margin is over twice as large for binge drinking than for non-binge drinking, and binge drinking also has intensive margin effects that non-binge drinking does not. Drinking-related grade reductions are larger among those who are more risk averse and future-oriented. An absence of effects on outcomes with which drinking is likely associated in a non-causal way provides further support for our interpretation of the coefficient estimates as causal effects.
    JEL: I1 I2
    Date: 2005–01
  8. By: Damien de Walque (World Bank)
    Abstract: Educated parents tend to have educated children. But is intergenerational transmission of human capital more nature, more nurture, or both? De Walque uses household survey data from Rwanda that contains a large proportion of children living in households without their biological parents. The data allows him to separate genetic from environmental parental influences. The nonrandom placement of children is controlled by including the educational attainment of the absent biological parents and the type of relationship that links the children to their “adoptive” families. The results of the analysis suggest that the nurture component of the intergenerational transmission of human capital is important for both parents, contrary to recent evidence proposed by Behrman and Rosenzweig (2002) and Plug (2004). The author concludes that mothers’ education had no environmental impact on children’s schooling. Interestingly, mothers’ education matters more for girls, while fathers’ education is more important for boys. Finally, an important policy recommendation in the African context emerges from the analysis: the risk for orphans or abandoned children to lose ground in their schooling achievements is minimized if they are placed with relatives. This paper—a product of the Public Services Team, Development Research Group—is part of a larger effort in the group to understand the determinants of education and its intergenerational transmission.
    Keywords: Education
    Date: 2005–01–10
  9. By: Claudio Bravo-Ortega; Jose de Gregorio
    Abstract: Are natural resources a blessing or a curse? Bravo-Ortega and De Gregorio present a model in which natural resources have a positive effect on the level of income and a negative effect on its growth rate. The positive and permanent effect on income implies a welfare gain. There is a growth effect stemming from a composition effect. However, the authors show that this effect can be offset by having a large level of human capital. They test their model using panel data for the period 1970–90. They extend the usual specifications for economic growth regressions by incorporating an interaction term between human capital and natural resources, showing that high levels of human capital may outweigh the negative effects of the natural resource abundance on growth. The authors also review the historical experience of Scandinavian countries, which in contrast to Latin America, another region well-endowed with natural resources, shows how it is possible to grow fast based on natural resources. This paper is a product of the Office of the Chief Economist, Latin America and the Caribbean Region.
    Keywords: Education; Macroecon & Growth
    Date: 2005–01–10
  10. By: Rosangela Bando; Luis F. Lopez-Calva; Harry Anthony Patrinos
    Abstract: The authors use panel data for Mexico for 1997 to 1999 to test several assumptions regarding the impact of a conditional cash transfer program on child labor, emphasizing the differential impact on indigenous households. Using data from the conditional cash transfer program in Mexico—PROGRESA (OPORTUNIDADES)—they investigate the interaction between child labor and indigenous households. While indigenous children had a greater probability of working in 1997, this probability is reversed after treatment in the program. Indigenous children also had lower school attainment compared with Spanish-speaking or bilingual children. After the program, school attainment among indigenous children increased, reducing the gap. This paper—a product of the Education Sector Unit, Latin America and the Caribbean Region—is part of a larger effort in the region to evaluate human development programs.
    Keywords: Education; Labor & Employment; Poverty
    Date: 2005–01–12
  11. By: Honggao Cao (Institute for Social Research, University of Michigan)
    Abstract: Students in any schools are not a random collection from the population. They become schoolmates because of their parents' selections of school quality that are contingent on their genetic abilities and family background. Even specified correctly, the conventional educational production functions cannot be used to find the effects of school inputs or quality. Therefore, the weak or zero relationship between school inputs and student achievement widely documented in the literature by no means implies that school inputs or quality does not matter. Further, since students enter schools by self-selection, any observed differences in student achievement between public and private schools do not necessarily mean that these schools have any differences in the effectiveness of operation.
    Keywords: Self-selection, school quality, educational production function, student achievement
    JEL: I
    Date: 2005–01–08
  12. By: Cristina Hernandez-Quevedo; Andrew M Jones; Nigel Rice
    Abstract: This paper explores reporting bias and heterogeneity in the measure of self-assessed health (SAH) used in the British Household Panel Survey (BHPS). The ninth wave of the BHPS includes the SF-36 general health questionnaire, which incorporates a different wording to the self-assessed health variable used at other waves. Considerable attention has been devoted to the reliability of SAH and the scope for contamination by measurement error; the change in wording at wave 9 provides a form of natural experiment that allows us to assess the sensitivity of panel data analyses to a change in the measurement instrument. In particular, we investigate reporting bias due explicitly to the change in the question. We show how progressively more general specifications of reporting bias can be implemented using panel data ordered probit and generalised ordered probit models. Our results suggest that the distribution of SAH does shift at the ninth wave but there is little evidence that this varies with socio-economic characteristics at an individual level.
    Keywords: self-assessed health; reporting bias; ordered probit; generalised ordered probit; panel data
    JEL: I12 C23

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