nep-edu New Economics Papers
on Education
Issue of 2005‒04‒16
23 papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Educational Spillovers: Does One Size Fit All? By Robert Baumann; Raphael Solomon
  2. The Changing Wage Return to an Undergraduate Education By O'Leary, Nigel C.; Sloane, Peter J.
  3. School-to-Career and Post-Secondary Education: Evidence from the Philadelphia Educational Longitudinal Study By Furstenberg, Frank F. , Jr.; Neumark, David
  4. Children education in Senegal : how does family background influence achievement By Christelle Dumas; Sylvie Lambert
  5. Healthy Aging at Older Ages: Are Income and Education Important? By Neil J. Buckley; Frank T. Denton; A. Leslie Robb; Byron G. Spencer
  6. School-to-Career and Post-Secondary Education: Evidence from the Philadelphia Educational Longitudinal Study By Frank F. Furstenberg, Jr.; David Neumark
  7. Protecting Education for the Poor in Times of Crisis: An Evaluation of a Scholarship Program in Indonesia By Robert Sparrow
  8. Capital Augmenting and Labor Augmenting Approach in Measuring Contribution of Human Capital and Education to Economic Growth By Milenko Popovic
  9. Availability of Higher Education and Long-Term Economic Growth By Akiomi Kitagawa; Ryo Horii; Koichi Futagami
  10. Improving Learning at Universities: Who is Responsible? By J.S. Armstrong
  11. Are Student Ratings of Instruction Useful? By J.S. Armstrong
  12. Learner Responsibility in Management Education, or Ventures into Forbidden Research (with Comments) By J. S. Armstrong
  13. Teacher vs. Learner Responsibility in Management Education By J. S. Armstrong
  14. Models for ranking European institutions of higher learning with an application to data from Greece By Georgios Bitros
  15. How Optimal Educational and Fertility Decisions Are Getting Us Apart By Jakub Growiec
  16. Hidden Teacher Effort in Educational Production: Monitoring vs. Merit Pay By Christian Jaag
  17. Developing lifelong education in the SMEs. A work-in-progress program in Italy By Giuseppe Perrone
  18. The Rise in Returns to Education and the Decline in Household Savings By Areendam Chanda
  21. Sorting, Selection, and Transformation of Return to College Education in China By Belton M Fleisher; Haizheng Li; Shi Li; Xiaojun Wang
  22. Why emotional capital matters in education and in labour? toward an Optimal exploitation of human capital and knowledge management By Bénédicte Gendron
  23. The Relationship between Educational Expenditures and Outcomes By François Leclercq

  1. By: Robert Baumann; Raphael Solomon
    Abstract: In a search model of production, where agents accumulate heterogeneous amounts of human capital, an individual worker’s wage depends on average human capital in the searching population. Following this model, the authors use a large American panel data set to estimate a Mincerian wage equation augmented with terms for average human capital. They find that there is a positive and significant spillover effect, but that the effect differs by gender and population group (whites, blacks, and Hispanics), as well as educational status. The differing spillover effects can only partially be explained by occupational choice.
    Keywords: Labour markets
    JEL: I29 J24 J31
    Date: 2005
  2. By: O'Leary, Nigel C. (WELMERC, University of Wales Swansea); Sloane, Peter J. (WELMERC, University of Wales Swansea and IZA Bonn)
    Abstract: Between 1990/91 and 2000/01 the number of male undergraduates in Britain increased by over one-third while the number of female undergraduates has increased nearly twofold. Given this substantial increase in supply we would expect some impact on the wage premium for recent graduates unless demand has shifted in parallel. Following Katz and Murphy (1992), we adopt a simple supply and demand framework to analyse changes in earnings mark-ups across degree disciplines over time. Using a propensity score approach to match those graduates entering the labor market with an age balanced sample of individuals with two or more A-Levels from the Labour Force Survey, we find a significant decline in the markup for females, whilst no such change is apparent for males. These aggregate figures, however, mask a great deal of variation across degree subjects, with declines in those subjects in which women predominate and in the lowest quartile of the earnings distribution being identified. The results point to both supply and demand factors impacting on the graduate mark-up as theory would suggest.
    Keywords: education, wages
    JEL: I2 J0 J3
    Date: 2005–03
  3. By: Furstenberg, Frank F. , Jr. (University of Pennsylvania); Neumark, David (Public Policy Institute of California, NBER and IZA Bonn)
    Abstract: We study a set of programs implemented in Philadelphia high schools that focus on boosting post-secondary enrollment. These programs are less career oriented than traditional schoolto- work programs, but are consistent with the broadening of the goals of school-to-work to emphasize post-secondary education. The Philadelphia Longitudinal Educational Study (PELS) data set that we examine contains an unusually large amount of information on individuals prior to placement in STC programs. We use the detailed information in the PELS to study the process of selection into these programs and to examine their impact on a set of mainly schooling-related outcomes during and after high school, although we also consider their impact on non-academic outcomes. The data point to positive effects of these programs on high school graduation and on both academic and non-academic awards in high school, and similar negative effects on dropping out of high school. The results also suggest positive effects on aspirations for higher education and on college attendance. In addition, there is some evidence that these programs are more effective in increasing college attendance and aspirations among at-risk youths.
    Keywords: school-to-career, education
    JEL: I28 J24
    Date: 2005–03
  4. By: Christelle Dumas; Sylvie Lambert
    Abstract: This paper aims at studying the relationship between schooling and family background characteristics. The econometric analysis uses an original survey conducted in 2003 in Senegal that, uniquely, provides instruments permitting to deal with the endogeneity of background variables. The estimated effect of father’s education more than doubles when its endogeneity is accounted for. We also present results suggesting that family background has as much impact after entry at school than at younger ages, and that parental education affects children schooling through its contribution to parental preferences (and not only through higher efficiency in the production of human capital).
    Keywords: schooling mobility, education demand
    JEL: D12 I21 O12
    Date: 2005–04
  5. By: Neil J. Buckley; Frank T. Denton; A. Leslie Robb; Byron G. Spencer
    Abstract: Being higher on the socioeconomic scale is correlated with being in better health, but is there is a causal relationship? Using three years of longitudinal data for individuals aged 50 and older from the Canadian Survey of Labour and Income Dynamics, we study the health transitions for those who were in good health in the first year, focussing especially on income and education. The initial good health restriction removes from the sample those whose incomes may have been affected by a previous history of poor health, thus avoiding a well known problem of econometric endogeneity. We then ask, for those in good health, whether later transitions in health status are related to socioeconomic status. We find that they are that changes in health status over the subsequent two years are related in particular to income and education.
    Keywords: aging, health, income, education
    JEL: I12
    Date: 2004–12
  6. By: Frank F. Furstenberg, Jr.; David Neumark
    Abstract: We study a set of programs implemented in Philadelphia high schools that focus on boosting post-secondary enrollment. These programs are less career oriented than traditional school-to-work programs, but are consistent with the broadening of the goals of school-to-work to emphasize post-secondary education. The Philadelphia Longitudinal Educational Study (PELS) data set that we examine contains an unusually large amount of information on individuals prior to placement in STC programs. We use the detailed information in the PELS to study the process of selection into these programs and to examine their impact on a set of mainly schooling-related outcomes during and after high school, although we also consider their impact on non-academic outcomes. The data point to positive effects of these programs on high school graduation and on both academic and non-academic awards in high school, and similar negative effects on dropping out of high school. The results also suggest positive effects on aspirations for higher education and on college attendance. In addition, there is some evidence that these programs are more effective in increasing college attendance and aspirations among at-risk youths.
    JEL: I28 J24
    Date: 2005–04
  7. By: Robert Sparrow (Vrije University Amsterdam, Tinbergen Institute)
    Abstract: This paper analyses the impact of an Indonesian scholarship program, which was implemented to preserve access to education for the poor during the Southeast Asian economic crisis. Allocation followed a decentralized design that involved both geographic and individual tarteging. The identification strategy exploits this decentralised structure, relying on instrumental variables constructed from regional miss-targeting at the initial phase of allocation. The results show that allocation of scholarships was pro-poor, but with substantial leakage to the non-poor. The program has been successful in increasing enrolment, especially for primary school aged children from poor rural households. Morevoer, the scholarships seem to have assisted households in smoothing consumption during the crisis, relieving pressure on households' investments in education and utilization of child labour.
    Keywords: social safety net, program evaluation, education, child labour, child labor, Asian economic crisis
    Date: 2004–06
  8. By: Milenko Popovic (INSTITUTE OF ECONOMIC SCIENCES, Belgrade, Serbia & Montenegro)
    Abstract: In this paper an effort has been made to unveil some hidden and implicit assumptions that has been used in different models dealing with analysis and measurement of contribution of human capital to economic growth. In order to do it we started from the general production function with heterogeneous labor input and general production function with heterogeneous human and physical capital. By introducing different assumptions regarding the partial elasticity of substitution between different factors of production we derived different models for human capital contribution. Apart from making hidden assumptions of existing models explicit we also derived several others models that can be used for the same purposes.
    Keywords: Economic Growth, Growth Accounting, Human Capital, Capital of Education, Partial Elasticity of Sustitution
    JEL: O P
    Date: 2005–02–05
  9. By: Akiomi Kitagawa (Tohoku University); Ryo Horii (Osaka University); Koichi Futagami (Osaka University)
    Abstract: This paper examines the economic growth effects of limited availability of higher education in a simple endogenous growth model with overlapping generations. With limited availability, the scarcity of human capital keeps its price high and distributes a larger share of the aggregate output to young households. Under certain conditions, it leads to greater aggregate savings in each period, thereby enabling the economy to grow faster than without any limitation. In such cases, an excessive expansion in the availability causes a temporary boom followed by a serious deficiency in investible funds, resulting in a substantial slowdown in economic growth.
    Keywords: Endogenous Growth; Human Capital; Slowdown; Intergenerational Income Distribution
    JEL: O41
    Date: 2005–04–12
  10. By: J.S. Armstrong (The Wharton School)
    Abstract: Recently, I published a letter in the Wall Street Journal (Armstrong 2004a) with the basic message that business school education has been losing effectiveness. Most important, students are not learning to do things, such as making an effective oral presentation, writing a persuasive management report, listening to others, conducting a meeting, or using statistical procedures to analyze data. This problem is not confined to business schools; it is plaguing the educational system on almost every level. My letter drew responses from alumni, faculty, recruiters, consultants, and students. Nearly all of them agreed with my assessment, claiming that the problem is rampant but ignored. As I will show below, however, evidence-based suggestions can resolve the problem.
    Keywords: learning, universities
    JEL: A
    Date: 2005–02–04
  11. By: J.S. Armstrong (The Wharton School)
    Abstract: Despite the lead article^Rs title ^SValidity Concerns and Usefulness of Student Ratings of Instruction^T (Greenwald 1997) in the American Psychologist^R^Rs special section on teacher ratings, the papers did not provide direct evidence on ^Susefulness.^T There is no evidence that the use of teacher ratings improves learning in the long run. The papers do not show that the effects would improve the allocation of effort between teaching and research, or that the quality of the educational experience will be better, or that students and faculty will be happier. Given the evidence to date, the case for student ratings is weak. I raise some questions about usefulness, with a particular emphasis on the ratings^R effects on learning.
    Keywords: learning, universities
    JEL: A
    Date: 2005–02–04
  12. By: J. S. Armstrong (The Wharton School)
    Abstract: Formal education can be improved by transferring responsibility from the teacher to the learner. A simple approach to this is the time contract. Time contracts have been used successfully in nine quasi-experiments but, despite these successes, some educators see this as subversive research.
    Keywords: learning, universities, teachers
    JEL: A
    Date: 2005–02–04
  13. By: J. S. Armstrong (The Wharton School)
    Abstract: A literature review suggested that behavioral changes occur more rapidly when the learner assumed responsibility. Natural learning, an approach to help learners assume responsibility, was compared with the traditional strategy in seven field experiments. It produced more than twice as many long-term behavioral changes. It was superior also for attitude change, but not for gains in knowledge.
    Keywords: learning, universities, teachers, management, education
    JEL: A
    Date: 2005–02–04
  14. By: Georgios Bitros (Athens University of Economics & Business)
    Abstract: Monitoring the success of colleges and universities can be useful to many interested parties and for many purposes. For example, it can assist administrations to identify the strengths and weaknesses of their institutions and take corrective actions. It can enlighten the decisions of funding authorities, as transparency and accountability in public life are becoming subjects of wide social concern. And of course it can provide prospective university students and their parents with the data they need to make informed educational decisions. In this paper we propose a flexible analytical framework for ranking institutions of higher learning and apply it to date from 19 Department of Economics, Business Administration, and European International and Economic Studies that operated in Greece in 1998. Our results suggest that the proposed model is robust with respect to several criteria. In particular, the rankings in each category remain unchanged for a wide range of the weights employed to sum the contributions of research, teaching and other activities of the faculties. The top departments retain their relative positions in their categories irrespective of whether the rating criterion is research or teaching, thus ascertaining the finding that good teaching goes hand in hand with good research. And last, but not least, it is found that market ratings of the various departments, as represented by the evaluations of graduates their employers, and other interested parties, are consistent with the rankings based on academic criteria
    Keywords: University rankings, models of ranking, ranking of Greek economics and business departments
    JEL: A29
    Date: 2005–03–02
  15. By: Jakub Growiec (Warsaw School of Economics)
    Abstract: The influence of educational and fertility choices on the evolution of income distributions is studied within an overlapping-generations model. We find that in the long run, two distinct social classes emerge endogenously, characterized by different human capital levels and different household sizes. This finding relies only on parents' private versus public education choices and is further strengthened by the (bounded) trade-off between the quantity of offspring and its quality. Propensity to pay for children's extra education depends on parents' wealth, but also on average schooling efficiency. Increased schooling efficiency increases income inequality. It also pulls fertility up, but not in the poor households. If we introduce stochastic heredity, a calibrated model is able to replicate empirical income distributions endogenously with a fairly good fit.
    Keywords: private versus public education choice, fertility, human capital, income distribution dynamics, polarization
    JEL: D31 I21 J13 O15
    Date: 2005–03–14
  16. By: Christian Jaag (University of St. Gallen Institute of Public Finance & Fiscal Law)
    Abstract: This paper deals with the optimality of teacher incentive contracts in the presence of costly or limited government resources. It considers educational production under asymmetric information as a function of teacher effort and class size. In the presence of costly government resources and convex effort costs, teacher monitoring - which is wasteful in principle - may be superior to merit pay in order to induce second-best teacher effort; optimum class size is not affected by informational deficiencies. If the government budget is exogenously fixed, optimum teacher effort may not be affordable, which is shown to make the case for monitoring activity instead of incentive pay even stronger.
    Keywords: Education, Moral Hazard, Monitoring, Merit Pay, Incentives, Teachers
    JEL: I21 I28 D82
    Date: 2005–03–18
  17. By: Giuseppe Perrone
    Abstract: This communication reports on a work-in-progress project involving managers of Small and Medium Enterprises (SME) located in four Italian Regions: one of them is a historically less advantaged location. The research attempts to explore needs of training and education of managers and executives in the framework of a new approach to lifelong learning established by the Social Partners. Based on mail surveys and face to face interviews the research try to identify the knowledge and skills that are necessary for effective management in the current business environment. A practical and extensive test on the use of e-learning technologies was also performed.
    Keywords: Lifelong learning; Management education; Social Partnership; E-learning
    JEL: J
    Date: 2005–03–12
  18. By: Areendam Chanda (Louisiana State University)
    Abstract: This paper explores the consequences of rising returns to human capital investment on the personal savings rate. Over the past two decades, the return to college education has increased relative to high school education leading economists to argue the presence of 'skill biased technological progress'. The literature explaining household savings has also burgeoned considerably, motivated by its declining rate in the US over the past couple of decades. Stylized facts suggest a negative relationship between returns to education and savings rates across most of the past century and also a negative relationship between education spending and savings rates across OECD countries. In this paper, we present a model where a declining savings rate emerges as an outcome of an exogenously driven increase in the return to education. The link between the two is attributed to optimizing behavior of altruistic households. The results of our model are robust to the inclusion of life cycle savings and unintentional bequests. Some of the interesting results of our model are (i) a rise in the return to education raises education spending ratio by less than what it reduces the aggregate savings rate (ii) for some parameter values it actually reduces both the education spending rate and the aggregate savings rate and finally, (iii) it also raises the return to capital due to physical capital-human capital complementarity.
    Keywords: Skill Biased Technological Change, Savings, Education, Economic Growth
    JEL: D91 E21 O33
    Date: 2005–02–28
  19. By: SK Mishra (North Eastern Hill University, Shillong, Meghalaya, India); K Rio (North Eastern Hill University, Shillong, Meghalaya, India)
    Abstract: The enterprise of running private schools has of late assumed the nature of an industry in India. Ever-increasing population, a race for providing education to ones children, degenerating quality of education in govt.-run schools, unlimited supply of educated youths ready to work at the lowest salary, and the possibilities of earning huge profits for a modest investment together have contributed to the viability of this industry. In Kohima, the capital city of Nagaland (India), there are 31 private high/higher secondary schools against only 3 govt.-run schools. These private schools enroll some 25000 pupils. Enrolment in the govt.- run schools is barely 1600. These private schools employ 766 teachers and pay them an average salary, just 1/3rd of what the govt.-run schools pay. According to the ILO (1996) definition of subsistence wages the employees of these schools barely earn a subsistence wage. Nevertheless, these schools generate a revenue of Rs. 88 million of which Rs. 37 million is the net profit. Our analysis shows that private schooling industry in Kohima operates in a monopolistic competition market - bordering on oligopoly. There is price leadership in determining the fees to be charged by the schools making this industry.
    Keywords: Micro-economics of schools, private schooling industry, India, Kohima, Nagaland, oligopoly, subsistence level salaries
    JEL: P Q Z
    Date: 2005–04–14
  20. By: Muhammad Sabir (Social Policy & Development Centre)
    Abstract: To what extent has government education spending in Pakistan been effective in reducing gender gaps in enrollments? To answer this question, this article reviews the benefit incidence of government education spending. It finds that government subsidies directed towards primary education are pro poor in all four provinces of Pakistan. Moreover, females has disadvantage in access to primary education. However, government subsidies directed towards higher education poorly targeted and poorest income group receives less than the riches income group and indeed favor those who are better off. Similarly, the gender disparity in access to public subsidy is higher at tertiary level and lowest at primary level, which also reflects poor targeting. Improving targeting to the poor as well as better female participation involves not simply rearranging the public subsidies, but also addressing the constraints that prevent the poor and females from accessing these services.
    Keywords: Gender, Public Expenditure on Education, Benefit Incidence
    JEL: D6 D7 H
    Date: 2005–03–11
  21. By: Belton M Fleisher (Department of Economics, Ohio State University); Haizheng Li (Georgia Tech); Shi Li (Chinese Academy of Social Sciences); Xiaojun Wang (Department of Economics, University of Hawaii at Manoa)
    Abstract: We estimate selection and sorting effects on the evolution of the private return to schooling for college graduates during China’s reform between 1988 and 2002. We find evidence of substantial sorting gains under the traditional system, but gains have diminished and even become negative in the most recent data. We take this as evidence consistent with the growing influence of private financial constraints on decisions to attend college as tuition costs have risen and the relative importance of government subsidies to higher education has declined.
    Keywords: return to schooling, sorting gains, heterogeneity, financial constraints, comparative advantage, China
    JEL: J31 J24 O15
    Date: 2005
  22. By: Bénédicte Gendron (MATISSE)
    Abstract: From the perspective of the Chicago school, there is no behaviour that is not interpretable as economic. In this paper, we discuss the assertion in the perspective of an optimal constitution and exploitation of Human Capital, through our conceptual framework named Emotional Capital (EC). Referring to emotional intelligence, we show that emotional capital, more than an additional capital, is a booster capital potentializing or energyzing the human, social and cultural capitals, EC is critical to enable human capital formation, accumulation and, its optimal exploitation for individuals and crucial in knowledge management in the today's increasingly complex and competitive global workplace for companies and organisations. Our conceptual model enables to understand student academic success or failure on the one hand, the different occupational and jobs choices and career prospect between men and women, and organizations or companies successes as well, on the other hand.
    Keywords: Human capital, emotional capital, skills, occupational choice, economics of gender, economics education, education, labour, knowledge management, organizational behavior, personnel management, labor management
    JEL: A2 D23 D83 I21 J2 J21 J24 J16 M12 M54
    Date: 2004–12
  23. By: François Leclercq (DIAL, Université Paris 1, UNESCO)
    Abstract: (english) This paper presents a survey of the large empirical literature in economics that has sought to examine the relationship between educational expenditures and outcomes in both developed and developing countries. The main feature of this literature is the remarkable lack of consensus about the results of standard studies using the ‘education production function’ conceptual framework, whether at the macro or at the micro level. Experimental evidence that has recently started to accumulate may provide more reliable guidance to policy interventions aimed to improve attainment and achievement. Another strand of literature is emphasizing the incentives structure of the school systems, which affects the way in which available school resources are combined to ‘produce’ outcomes. However, the ability of economists to adequately model the functioning of schools could be further enhanced by making use of insights from other social sciences, e.g. social psychology and sociology, pertaining to the behavior of teachers and students. Although they remain quite marginal to the field, recent behavioral economics papers may provide a basis for such a renewal of the economics of education. _________________________________ (français) Cet article présente une synthèse critique des travaux consacrés par les économistes de l’éducation à la relation entre dépenses d’éducation et résultats scolaires. Qu’ils portent sur les pays développés ou les pays en développement, et qu’ils utilisent des données agrégées au niveau des pays ou des données individuelles, les travaux utilisant le cadre conceptuel standard – la « fonction de production éducative » – n’ont pas établi de régularité empirique incontestable. L’approche dite « expérimentale » utilisée dans quelques travaux récents pourrait offrir des résultats plus robustes quant à l’impact de politiques éducatives spécifiques sur le nombre d’années d’études et le niveau de connaissances atteints par les élèves. Un nouvel ensemble de travaux s’intéresse désormais aux incitations données aux enseignants par les systèmes scolaires, qui déterminent la façon dont les ressources à la disposition des écoles sont utilisées pour « produire » des résultats scolaires. Cependant, la capacité des économistes à modéliser de façon adéquate le fonctionnement des écoles pourrait être améliorée par la prise en compte de concepts empruntés à d’autres sciences sociales, comme la psychologie sociale ou la sociologie ; bien qu’ils restent rares et soient encore peu cités, quelques articles récents d’économie « comportementale » pourraient conduire à un tel renouveau de l’économie de l’éducation.
    Keywords: Economics of education, education production function, randomized experiments, natural experiments, school resources, school incentives, teachers, Économie de l’éducation, fonction de production éducative, expériences aléatoires, expériences naturelles, ressources des écoles, incitations, professeurs.
    JEL: H52 I2
    Date: 2005–04

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