nep-edu New Economics Papers
on Education
Issue of 2005‒08‒13
seven papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Student Flows and Migration: An Empirical Analysis By Axel Dreher; Panu Poutvaara
  2. Culture and Institutions: Economic Development in the Regions of Europe By Guido Tabellini
  3. Education, Matching and the Allocative Value of Romance By Booth, Alison L; Coles, Melvyn G
  4. Educational Attainment and Child Labor: Do Subsidies Work? By Subhayu Bandyopadhyay; Abhra Roy
  5. Can Democracy Educate a Society? By Hans Gersbach; Lars Siemers
  6. Inequality By Edward L. Glaeser
  7. Environmental Regulation and Economic Growth under Education Externalities By Paul Makdissi; Quentin Wodon

  1. By: Axel Dreher; Panu Poutvaara
    Abstract: Using panel data for 78 countries of origin we examine the impact of student flows to the United States on subsequent migration there over the period 1971-2001. What we find is that the stock of foreign students is an important predictor of subsequent migration. This holds true whether or not the lagged endogenous variable is included. The relationship is robust to the inclusion of time and country dummies, and remains when we account for outliers. The basic results also hold for a cross section of 36 countries of origin and 9 host countries. Our results have important policy implications which we discuss in the last section.
    Keywords: migration, education, student flows, brain drain
    JEL: F22 I20 J61 O15
    Date: 2005
  2. By: Guido Tabellini
    Abstract: Does culture have a causal effect on economic development? The data on European regions suggest that it does. Culture is measured by indicators of individual values and beliefs, such as trust and respect for others, and confidence in individual self-determination. To isolate the exogenous variation in culture, I rely on two historical variables used as instruments: the literacy rate at the end of the XIXth century, and the political institutions in place over the past several centuries. The political and social history of Europe provides a rich source of variation in these two variables at a regional level. The exogenous component of culture due to history is strongly correlated with current regional economic development, after controlling for contemporaneous education, urbanization rates around 1850 and national effects. Moreover, the data do not reject the over-identifying assumption that the two historical variables used as instruments only influence regional development through culture. The indicators of culture used in this paper are also strongly correlated with economic development and with available measures of institutions in a cross-country setting.
    Keywords: culture, economic development, trust, literacy, institutions
    JEL: F10 N13 O10 P10
    Date: 2005
  3. By: Booth, Alison L; Coles, Melvyn G
    Abstract: Societies are characterized by customs governing the allocation of non-market goods such as marital partnerships. We explore how such customs affect the educational investment decisions of young singles and the subsequent joint labour supply decisions of partnered couples. We consider two separate matching paradigms for agents with heterogeneous abilities - one where partners marry for money and the other where partners marry for romantic reasons orthogonal to productivity or debt. These generate different investment incentives and therefore have a real impact on the market economy. While marrying for money generates greater investment efficiency, romantic matching generates greater allocative efficiency, since more high ability individuals participate in the labour market. The analysis offers the possibility of explaining cross-country differences in educational investments and labour force participation based on matching regimes.
    Keywords: cohabitation; education; marriage; matching; participation
    JEL: I21 J12 J16 J41
    Date: 2005–06
  4. By: Subhayu Bandyopadhyay (West Virginia University and IZA Bonn); Abhra Roy (Kennesaw State University and IZA Bonn)
    Abstract: We analyze the role of education subsidies in affecting child labor where a family chooses the quantity of children, the level of educational attainment and the fraction of time an offspring spends on child labor. This is relevant because following the threat of trade sanctions and suspension of GSP privileges, many developing countries are aggressively pursuing educational policy to reduce the incidence of child labor. We find that education subsidies may increase (or reduce) the equilibrium level of education and child labor depending on the relative weight that a family attaches to quality. The latter depends on the educational attainment level. We find that subsidies that target fixed and those that target variable costs may lead to opposite effects on child labor. Given that established subsidy programs like PROGRESA have both variable and fixed components, this finding assumes special relevance. It is interesting to note that the empirical literature in this area has found that a rise in the cost of schooling decreases child labor in some countries while increasing it in others. Our findings suggest that there may be reasons for observing such apparent contradictions.
    Keywords: child labor, educational attainment, education subsidies
    JEL: J1 O1
    Date: 2005–07
  5. By: Hans Gersbach (University of Heidelberg, CEPR and IZA Bonn); Lars Siemers (University of Heidelberg)
    Abstract: We examine whether democratic societies can escape poverty traps. Unrestricted agenda setting with simple majority rules fail to educate a society, because education-enhancing redistribution will not occur. We show that a combination of suitable constitutional rules overcomes this impossibility result: rotating agenda setting and agenda repetition in combination with flexible majority rules or with a tax protection rule.
    Keywords: constitutional design, claims on deductions, flexible majority rules, agenda repetition, poverty traps, child labor
    JEL: D72 H20 H52 I20 O10 O40
    Date: 2005–07
  6. By: Edward L. Glaeser
    Abstract: This paper reviews five striking facts about inequality across countries. As Kuznets (1955) famously first documented, inequality first rises and then falls with income. More unequal societies are much less likely to have democracies or governments that respect property rights. Unequal societies have less redistribution, and we have little idea whether this relationship is caused by redistribution reducing inequality or inequality reducing redistribution. Inequality and ethnic heterogeneity are highly correlated, either because of differences in educational heritages across ethnicities or because ethnic heterogeneity reduces redistribution. Finally, there is much more inequality and less redistribution in the U.S. than in most other developed nations.
    JEL: J0
    Date: 2005–08
  7. By: Paul Makdissi (Département d'économique, Université de Sherbrooke); Quentin Wodon (AFTPM, World Bank)
    Abstract: Using an extension of Lucas' model of endogenous growth with education externality, we show that an environmental tax may increase growth. This is because the tax makes physical capital accumulation less attractive, thereby correcting for the underinvestment by agents in human capital.
    Keywords: Regulation, Environment, Growth, Human Capital
    JEL: O11 O13 Q28
    Date: 2004

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