nep-edu New Economics Papers
on Education
Issue of 2005‒07‒11
ten papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Cross-National Surveys of Learning Achievement: How Robust are the Findings? By Giorgina Brown; John Micklewright; Sylke V. Schnepf; Robert Waldmann
  2. Are Student Exchange Programs Worth It? By Dolores Messer; Stefan C. Wolter
  3. Increasing Returns to Education and the Skills Under-Investment Trap By Alison Booth; Melvyn Coles
  4. Who Are the Workers Who Never Joined a Union? Empirical Evidence from Germany By Claus Schnabel; Joachim Wagner
  5. Is Early Learning Really More Productive? The Effect of School Starting Age on School and Labor Market Performance By Peter Fredriksson; Björn Öckert
  6. Mexican Immigration and Self-Selection: New Evidence from the 2000 Mexican Census By Pablo Ibarraran; Darren Lubotsky
  7. China’s Economic Growth 1978-2025: What We Know Today about China’s Economic Growth Tomorrow By Carsten A. Holz
  8. Does Longevity Cause Growth By Moshe Hazan; Hosny Zoabi
  9. Tax Policy and Human Capital Formation with Public Investment in Education By Simone Valente
  10. Availability of Higher Education and Long-Term Economic Growth By Akiomi Kitagawa; Ryo Horii; Koichi Futagami

  1. By: Giorgina Brown (ISTAT, Rome); John Micklewright (S3RI, University of Southampton and IZA Bonn); Sylke V. Schnepf (S3RI, University of Southampton and IZA Bonn); Robert Waldmann (University of Rome Tor Vergata)
    Abstract: International surveys of learning achievement and functional literacy are increasingly common. We consider two aspects of the robustness of their results. First, we compare results from four surveys: TIMSS, PISA, PIRLS and IALS. This contrasts with the standard approach which is to analyse a single survey with no regard as to whether it agrees or not with other sources. Second, we investigate whether results are sensitive to the choice of item response model used by survey organisers to aggregate respondents’ answers. In both cases we focus on countries’ average scores, the within-country differences in scores, and on the association between the two. There is mixed news to report.
    Keywords: educational achievement, test scores, IALS, PISA, PIRLS, TIMSS
    JEL: I21 J13
    Date: 2005–07
  2. By: Dolores Messer (University of Bern); Stefan C. Wolter (Swiss Coordination Center for Research in Education, University of Bern, CESifo and IZA Bonn)
    Abstract: The number of university students participating in exchange programs has risen sharply over the last decade, but a survey of Swiss university graduates (class of 1999 and 2001) shows that participation in student exchange programs significantly prolongs the period of time spent studying at university. Given this fact, the advantages of exchange programs for students need to be identified. Analyses show that student exchange programs are associated with higher starting salaries and an increased likelihood of opting for postgraduate study - but only if all exchange semesters are factored in, not just those accredited by the university of matriculation. Using instrumental variable estimations (IV), however, shows that the cited outcomes are not causally related to participation in exchange programs. Therefore the big question is: Where’s the benefit that justifies having to study for almost a whole year longer?
    Keywords: exchange semester, ERASMUS, graduate survey, instrumental variables, Switzerland
    JEL: J24 J31 J44
    Date: 2005–07
  3. By: Alison Booth (RSSS, Australian National University and IZA Bonn); Melvyn Coles (ICREA, IAE and IZA Bonn)
    Abstract: We model educational investment and labor supply in a competitive economy with home and market production. Heterogeneous workers are assumed to have different productivities both at home and in the workplace. We investigate the degree to which there is under-investment in human capital, and examine the deadweight losses that accrue via distortionary taxes. We show that there are increasing returns to education at the participation margin, and that deadweight losses are most severe for workers located here. Although the social planner’s optimum implies the worker should choose a high level of education and participate in the market sector, instead the worker chooses not to invest in human capital and either nonparticipation or partial participation in market-sector work. A severe deadweight loss is generated by this substitution effect. Those individuals most likely to be in this trap are those types with large enough home productivity, who are likely either to be involved in home production or to be characterized by a strong preference for other non-market sector activities.
    Keywords: home production, labor supply, returns to education, income tax
    JEL: H24 J13 J24 J31 J42
    Date: 2005–07
  4. By: Claus Schnabel (University of Erlangen-Nuremberg); Joachim Wagner (University of Lueneburg and IZA Bonn)
    Abstract: Using representative data from the German social survey ALLBUS 2002 and the European Social Survey 2002/03, this paper provides the first empirical analysis of trade union nevermembership in Germany. We show that between 54 and 59 percent of all employees in Germany have never been members of a trade union. Individuals’ probability of nevermembership is significantly affected by their personal characteristics (in particular age, education and status at work), their political orientation and (to a lesser degree) their family background, and by broad location. In addition, occupational and workplace characteristics play a significant role. Most important in this regard is the presence of a union at the workplace.
    Keywords: union membership, never-membership, Germany
    JEL: J51
    Date: 2005–07
  5. By: Peter Fredriksson (Uppsala University, IFAU and IZA Bonn); Björn Öckert (IFAU, Uppsala)
    Abstract: In Sweden, children typically start compulsory school the year they turn seven. Hence, individuals born just before or just after the new year, have about the same date of birth but start school at different ages. We exploit this source of exogenous variation, to identify the effects of age at school entry on test scores, grades, educational attainment and labor market performance. Using a rich data set for the entire Swedish population born 1935-84, we find that children who start school at an older age do better in school and go on to have more education than their younger peers. Children from families with weaker educational tradition have more to win from starting school later. The long-run earnings effects are positive but small. However, since starting school later entails the opportunity cost of entering the labor market later, the net earnings effect over the entire life-cycle is negative. Exploiting withinschool variation in peer age composition, we find that the school starting age effect primarily is due to absolute maturity rather than to the relative age in the class.
    Keywords: child education, school starting age, regression-discontinuity design
    JEL: J24 I21
    Date: 2005–07
  6. By: Pablo Ibarraran; Darren Lubotsky
    Abstract: We use data from the 2000 Mexican Census to examine how the education and socioeconomic status of Mexican immigrants to the United States compares to that of non-migrants in Mexico. Our primary conclusion is that migrants tend to be less educated than non-migrants. This finding is consistent with the idea that the return to education is higher in Mexico than in the United States, and thus the wage gain to migrating is proportionately smaller for high-educated Mexicans than it is for lower-educated Mexicans. We also find that the degree of negative selection of migrants is stronger in Mexican counties that have a higher return to education.
    JEL: J6 F2
    Date: 2005–07
  7. By: Carsten A. Holz (Hong Kong University of Science & Technology)
    Abstract: Views of the future China vary widely. While some believe that the collapse of China is inevitable, others see the emergence of a new superpower that increasingly poses a threat to the U.S. This paper examines the economic growth prospects of China over the next two decades. Extrapolating past real GDP growth rates into the future, the size of the Chinese economy surpasses that of the U.S. in purchasing power terms between 2012 and 2015; by 2025, China is likely to be the world's largest economic power by almost any measure. The extrapolations are supported by two types of considerations. First, China’s growth patterns of the past 25 years since the beginning of economic reforms match well those identified by standard economic development and trade theories (structural change, catching up, and factor price equalization). Second, decomposing China’s GDP growth into growth of labor and other variables, the near-certain information available today about the quantity and quality of Chinese laborers through 2015 and possibly several years after allows inferences about future GDP growth. Short of some cataclysmic event, and given a continuation of the generally sound economic policies of the past, demographics alone suggests China’s continued economic rise. If talent is randomly distributed in the world population and if agglomeration of talent is important, then the odds are strongly in China’s favor.
    Keywords: economic growth, growth accounting, growth forecasts, development theories, human capital formation, education (all: China)
    JEL: O1 O10 O11 O4 O40 O47 O53 J11 O3 I21
    Date: 2005–07–03
  8. By: Moshe Hazan (Hebrew University); Hosny Zoabi (Hebrew University)
    Abstract: This article challenges conventional wisdom by arguing that greater longevity cannot explain the significant accumulation of human capital during the transition from stagnation to growth. This is because greater longevity raises children's future income proportionally at all levels of education, leaving the relative return between quality and quantity unaffected. This result is consistent with historical evidence that longevity began to increase long before education did. Our theory also casts doubts on recent findings about a positive effect of health on education. This is because health raises the marginal return on quality and quantity, resulting in an ambiguous effect on the accumulation of human capital. We conclude that longevity and health have had a minor effect, if any, on the transition from stagnation to growth via investment in education.
    Keywords: longevity, health, fertility, education
    JEL: C6 D5 D9
    Date: 2005–07–04
  9. By: Simone Valente (Institute of Economic Research WIF , Swiss Federal Institute of Technology Zurich ETH)
    Abstract: This paper studies the effects of distortionary taxes and public investment in an endogenous growth OLG model with knowledge transmission. Fiscal policy affects growth in two respects: First, work time reacts to variations of prospective tax rates and modifies knowledge formation; second, public spending enhances labour efficiency but also stimulates physical capital through increased savings. It is shown that Ramsey-optimal policies reduce savings due to high tax rates on young generations, and are not necessarily growth-improving with respect to a pure private system. Non-Ramsey policies that shift the burden on adults are always growth-improving due to crowding-in effects: the welfare of all generations is unambiguously higher with respect to a private system, and there generally exists a continuum of non-optimal tax rates under which long-run growth and welfare are higher than with the Ramsey-optimal policy.
    Keywords: Endogenous growth, Human capital, Overlapping generations, Tax policy, Public investment.
    JEL: E62 O41 O11
    Date: 2005–07–07
  10. By: Akiomi Kitagawa (Faculty of Economics and Business Administration, Yokohama City University); Ryo Horii (Graduate School of Economics, Osaka University); Koichi Futagami (Graduate School of Economics, Osaka University)
    Abstract: This paper examines the relationship between the availability of higher education and an economyfs long-term growth rate in a simple endogenous growth model with overlapping generations. Under certain conditions, an increased availability of higher education narrows the rate-of-return difference between human and physical capital investments. This reduces the share of income received by the younger generation, negatively affecting aggregate savings in subsequent periods, and thereby causing a substantial slowdown in the long-term growth rate. Such a paradoxical slowdown is endemic to developed economies, where higher education plays a central role in accumulating human capital. Although the recovery from such a slowdown entails a major restructuring of educational institutions, the authority may not take preventative measures against it, being dazzled by a temporary boom during its early stages.
    JEL: O41 I28
    Date: 2003–11

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