nep-edu New Economics Papers
on Education
Issue of 2005‒09‒17
nine papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Tax Effects of Unemployment and the Choice of Educational Type By Alstadsæter, Annette; Kolm, Ann-Sofie; Larsen, Birthe
  2. Education, Neighbourhood Effects and Growth: An Agent Based Model Approach By Tanya Araújo; Miguel St. Aubyn
  3. Local Employment Growth in West Germany: A Dynamic Panel Approach By Uwe Blien; Jens Suedekum; Katja Wolf
  4. Religious Affiliation and Participation as Determinants of Women’s Educational Attainment and Wages By Evelyn Lehrer
  5. Evaluating Dominance Ranking of PSID Incomes by Various Household Attributes By Esfandiar Maasoumi; Almas Heshmati
  6. Social Security Incentives, Human Capital Investment and Mobility of Labor By Panu Poutvaara
  7. Why Is the Payoff to Schooling Smaller for Immigrants? By Barry R. Chiswick; Paul W. Miller
  8. Workplace Segregation in the United States: Race, Ethnicity, and Skill By Judith Hellerstein; David Neumark
  9. Economic Growth, Well-Being and Governance under Economic Reforms: Evidence from Indian States By Sudip Ranjan Basu

  1. By: Alstadsæter, Annette (Research Department, Statistics Norway,); Kolm, Ann-Sofie (Dept. of Economics, Stockholm University); Larsen, Birthe (CIM and Copenhagen Business School)
    Abstract: This paper examines the effect of taxes on the individuals’ choices of educational direction, and thus on the economy’s skill composition. A proportional labour income tax induces too many workers with high innate ability to choose an educational type with high consumption value and low effort costs. This increases the skill mismatch and aggregate unemployment in the economy. The government can correct for this distortion by use of differentiated tuition fees or tax rates.
    Keywords: Unemployment; matching; education; optimal taxation; tuition fees
    JEL: H21 H24 J64 J68
    Date: 2005–04–20
  2. By: Tanya Araújo; Miguel St. Aubyn
    Abstract: Endogenous, ideas-led, growth theory and agent based modelling with neighbourhood effects literature are crossed. In an economic overlapping generations framework, it is shown how social interactions and neighbourhood effects are of vital importance in the endogenous determination of the long run number of skilled workers and therefore of the growth prospects of an economy. Neighbourhood effects interact with the initial distribution of educated agents across space and play a key role in the long run stabilisation of the number of educated individuals. Our model implies a tendency towards segregation, with a possibly positive influence on growth, if team effects operate. The long run growth rate is also shown to depend on the rate of time preference. Initial circumstances are of vital importance for long run outcomes. A poor initial education endowment will imply a long run reduced number of skilled workers and a mediocre growth rate, so there no economic convergence tendency. On the contrary, poor societies will grow less, or will even fall into a poverty trap, and will diverge continuously from richer ones.
    Keywords: agent modelling; economic growth; education; human capital; neighbourhood effects; poverty trap.
    JEL: I20 J24 R12
  3. By: Uwe Blien (Institute for Employment Research (IAB) and IZA Bonn); Jens Suedekum (University of Konstanz and IZA Bonn); Katja Wolf (Institute for Employment Research (IAB))
    Abstract: In this paper we study the dynamics of local employment growth in West Germany from 1980 to 2001. Using dynamic panel techniques, we analyse the timing of the impact of diversity and specialisation, as well as of the human capital structure of local industries. Diversity has a positive effect on employment growth in the short run, which is stronger in manufacturing than in services. Concerning specialization we find evidence for mean reversion, which is inconsistent with the idea that growth emphasizes itself. But there is considerable inertia in this process. A positive effect of education is only found in manufacturing. Additionally, we look at the impact of firm size and regional wages on local employment growth.
    Keywords: regional labour markets, externalities, local employment growth, dynamic panel estimation, urbanization and localisation effects
    JEL: R11 O40
    Date: 2005–07
  4. By: Evelyn Lehrer (University of Illinois at Chicago and IZA Bonn)
    Abstract: Using a human capital model, this paper develops hypotheses about how religious affiliation and participation during childhood influence years of schooling completed and subsequent performance in the labor market as measured by wages. The hypotheses are tested using data from the 1995 National Survey of Family Growth, a large-scale survey addressed to a representative sample of women in the United States. Religious affiliation is found to have a significant impact on years of schooling completed, with the effects being particularly pronounced for Jews and conservative Protestants. The impact of religious affiliation on wages largely mirrors its influence on educational attainment, although evidence of additional effects operating through other channels is also uncovered. In addition, the results show that youth who attend religious services frequently during childhood go on to complete more years of schooling than their less observant counterparts.
    Keywords: religion, education, wages
    JEL: J24 J31
    Date: 2005–07
  5. By: Esfandiar Maasoumi (Southern Methodist University); Almas Heshmati (TEPP, Seoul National University and IZA Bonn)
    Abstract: We examine the dynamic evolution of incomes, both disposable and gross, for several groups in the PSID panel data at several points from 1968 to 1997. We employ the extended Kolmogorov-Smirnov tests of First and Second Order Stochastic Dominance (SD) as implemented by Maasoumi and Heshmati (2000). They do not impose the Least Favorable Case (LFC) of the composite null hypotheses of SD orders. This is in contrast to simulation and bootstrap-based techniques that do so, resulting in tests that are not asymptotically similar or unbiased. Our approach is also different from the subsampling technique of Linton et al (2005) who obtain critical values for these tests under very general sampling schemes. We offer partial control for many individual/family specific attributes, such as age, gender, education, number of children, work and marital status, by comparing group cells. This avoids having to specify and estimate models of dependence of incomes on these attributes, but lacks the multiple controls that is the promise of such techniques. We find a surprising number of strong rankings, both between groups and over time, in gross income and, to a lesser extent, in ‘disposable’ incomes.
    Keywords: Stochastic Dominance, bootstrap, income distribution, testing, PSID, gender, education, age, marital status
    JEL: C14 D33 D63 H24
    Date: 2005–07
  6. By: Panu Poutvaara (University of Helsinki, CEBR, CESifo, HECER and IZA Bonn)
    Abstract: Migration between countries with earnings-related and flat-rate pay-as-you-go social security systems may change human capital investments in both countries. The possibility of emigration boosts investments in human capital in the country with flat-rate benefits. Correspondingly, those expecting to migrate from the country with earnings-related benefits to a country with flat-rate benefits may reduce their investment in education. With suitably planned transfers between the two countries, allowing for migration may generate a Paretoimprovement for all current and future generations. Without transfers, either country may be unable to pay for promised benefits when labor becomes mobile.
    Keywords: social security, education, migration, earnings-related and flat-rate pensions
    JEL: H55 I2 F22
    Date: 2005–07
  7. By: Barry R. Chiswick (University of Illinois at Chicago and IZA Bonn); Paul W. Miller (University of Western Australia and IZA Bonn)
    Abstract: This paper is concerned with why immigrants appear to have consistently lower partial effects of schooling on earnings than the native born, both across destinations and in different time periods within countries. It uses the Over-Under-Required education approach to occupations, a new decomposition technique developed especially for this approach, and data from the 2000 Census of the United States. Based on the average (mean or mode) level of schooling in their occupation, the schooling of the native and foreign born adult men is divided into the "required" (average) level, and years of under- or overeducation. Immigrants have a wider variance in schooling, with an especially large proportion undereducated given the average schooling level in their occupation. Immigrants are shown to receive approximately the same rate of return to the "required" (occupational norm) level of education, but experience a smaller negative effect of years of undereducation, and to a lesser extent a small positive effect of overeducation. About two-thirds of the smaller effect of schooling on earnings for immigrants is due to their different payoffs to undereducation and overeducation. The remainder is largely due to their different distribution of years of schooling. The country-of-origin differences in the returns to under- and overeducation are consistent with country differences in the international transferability of skills to the US and the favorable selectivity of economic migrants, especially those from countries other than the English-speaking developed countries.
    Keywords: immigrants, schooling, occupations, earnings, rates of return, selectivity
    JEL: F22 I21 J24 J31 J61
    Date: 2005–08
  8. By: Judith Hellerstein; David Neumark
    Abstract: We study workplace segregation in the United States using a unique matched employer-employee data set that we have created. We present measures of workplace segregation by education and language–as skilled workers may be more complementary with other skilled workers than with unskilled workers–and by race and ethnicity, using simulation methods to measure segregation beyond what would occur randomly as workers are distributed across establishments. We also assess the role of education- and language-related skill differentials in generating workplace segregation by race and ethnicity, as skill is often correlated with race and ethnicity. Finally, we attempt to distinguish between segregation by skill based on general crowding of unskilled poor English speakers into a narrow set of jobs, and segregation based on common language for reasons such as complementarity among workers speaking the same language. Our results indicate that there is considerable segregation by education and language in the workplace. Racial segregation in the workplace is of the same order of magnitude as education segregation, and segregation between Hispanics and whites is larger yet. Only a tiny portion of racial segregation in the workplace is driven by education differences between blacks and whites, but a substantial fraction of ethnic segregation in the workplace can be attributed to differences in language proficiency.
    Date: 2005–09
  9. By: Sudip Ranjan Basu (Graduate Institute of International Studies HEI , Geneva)
    Abstract: This paper provides empirical evidence, from the study of sixteen major Indian states for the period 1980-2001, that under the economic reform process, the better institutional mechanism could actually help economies to grow faster with higher level of economic well-being. We estimate economic well-being index (by aggregating fifteen socio- economic variables, viz, education, infrastructure, technological progress, income, etc.) and also index of good governance (by aggregating thirteen variables indicating rule of law, government functioning, public services, press freedom, etc) by multivariate statistical measures. Panel regression showed that governance measures, and economic policy variables are crucial to explain differential level of development performance across states in India during the last two decades.
    Keywords: Growth, Well-being, Governance, Economic Reforms, Panel data, India
    JEL: B25 C23 O18 R11
    Date: 2005–09–08

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