nep-edu New Economics Papers
on Education
Issue of 2005‒10‒04
twenty papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Pareto-Improving Bequest Taxation By Volker Grossmann; Panu Poutvaara
  2. Education Policy and Equality of Opportunity By Gabriela Schuetz; Heinrich Ursprung; Ludger Woessmann
  3. Social Security Incentives, Human Capital Investment and Mobility of Labor By Panu Poutvaara
  4. Does Education Pay in Urban China? Estimating Returns to Education Using Twins By Hongbin Li; Pak Wai Liu; Ning Ma; Junsen Zhang
  5. Who wins and who loses from school accountability? The distribution of educational gain in English secondary schools By Burgess, Simon; Propper, Carol; Slater, Helen; Wilson, Deborah
  6. The Division of Labour, Worker Organisation, and Technological Change By Borghans,Lex; Weel,Bas,ter
  7. Towards a strategy for pro-poor growth in South-Eastern Europe By Hermann Sautter
  8. Trends in Regional Disparity in Human and Social Development in India By Dholakia Ravindra H
  9. On the non-random distribution of educational deprivation of children in India By Mothuri Venkatanarayana
  11. Human capital development in a complex learning system: the virt uous interaction between individuals, organizations and communiti es By Luciano PILOTTI; Silvia Rita SEDITA
  13. Uncovering Gender Differences in the Effects of Early Intervention: A Reevaluation of the Abecedarian, Perry Preschool, and Early Training Projects By Michael Anderson
  14. Does Commuting Reduce Wage Disparities? By Mihails Hazans
  15. Growth and Convergence across the U.S: Evidence from County-Level Data By Matthew Higgins; Daniel Levy; Andrew Young
  16. Flattening the Kuznets Curve By Gustav Papanek; Oldrich Kyn
  17. The Political Economy of Elite Dominance and Ethnic By Sarmistha Pal; Sugata Ghosh
  18. Fiscal sustainability and public debt in an endogenous growth model By Jesús Fernández-Huertas Moraga; Jean-Pierre Vidal
  19. European women - why do(n’t) they work? By Véronique Genre; Ramón Gómez Salvador; Ana Lamo
  20. Cross-country efficiency of secondary education provision - a semi-parametric analysis with non-discretionary inputs By António Afonso; Miguel St. Aubyn

  1. By: Volker Grossmann; Panu Poutvaara
    Abstract: Altruistic parents may transfer resources to their offspring by providing education, and by leaving bequests. We show that in the presence of wage taxation, a small bequest tax may improve efficiency in an overlapping-generations framework with only intended bequests, by enhancing incentives of parents to invest in their children’s education. This result holds even if the wage tax rate is held constant when introducing bequest taxation. We also calculate an optimal mix of wage and bequest taxes with alternative parameter combinations. In all cases, the optimal wage tax rate is clearly higher than the optimal bequest tax rate, but the latter is generally positive when the required government revenue in the economy is sufficiently high.
    Keywords: bequest taxation, bequests, education, Pareto improvement
    JEL: D64 H21 H31 I21
    Date: 2005
  2. By: Gabriela Schuetz; Heinrich Ursprung; Ludger Woessmann
    Abstract: We provide a measure of equality of educational opportunity in 54 countries, estimated as the effect of family background on student performance in two international TIMSS tests. We then show how organizational features of the education system affect equality of educational opportunity. Our model predicts that late tracking and a long pre-school cycle are beneficial for equality, while pre-school enrollment is detrimental at low levels of enrollment and beneficial at higher levels. Using cross-country variations in education policies and their interaction with family background at the student level, we provide empirical evidence supportive of these predictions.
    Keywords: equality of opportunity, educational production, family background, student performance, tracking, pre-school, efficiency-equity tradeoff
    JEL: H52 I21 J62
    Date: 2005
  3. By: Panu Poutvaara
    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 Pareto-improvement 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: F22 H55 I20
    Date: 2005
  4. By: Hongbin Li; Pak Wai Liu; Ning Ma; Junsen Zhang
    Abstract: This paper empirically estimates the returns to education using twins data that the authors collected from urban China. Our ordinary least-squares estimate shows that one year of schooling increases an individual¡¦s earnings by 8.4 percent. However, once we use the within-twin-pair fixed effects model, the return is reduced to 2.7 percent, which suggests that much of the estimated returns to education in China that have been found in previous studies are due to omitted ability or the family effect. This finding suggests that well-educated people are faring well in China mainly because of their superior ability or family background advantages, rather than because of knowledge that they acquired at school. We further investigate why the true return is low and the omitted ability bias high, and find evidence that it may be a consequence of the distinct education system in China, which is highly selective and exam oriented. More specifically, we find that high school education mainly serves as a mechanism to select college students, and has zero returns in terms of earnings. In contrast, both vocational school education and college education have a large return that is comparable to that found in rich Western countries.
    JEL: J31 O15 P20
    Date: 2005–09
  5. By: Burgess, Simon; Propper, Carol; Slater, Helen; Wilson, Deborah
    Abstract: In 1988 the UK government introduced greater accountability into the English state school sector. But the information that schools are required to make public on their pupil achievement is only partial. The paper examines whether accountability measures based on a partial summary of student achievement influence the distribution of student achievement. Since school ratings only incorporate test results via pass rates, schools have incentives to improve the performance of students who are on the margin of meeting these standards, to the detriment of very low achieving or high achieving pupils. Using pupil level data for a cohort of all students in secondary public sector schools in England, we find that this policy reduces the educational gains and exam performance in high stakes exams of very low ability students.
    Keywords: educational value added; high stakes exams; school accountability
    JEL: D23 I20 I28
    Date: 2005–09
  6. By: Borghans,Lex; Weel,Bas,ter (ROA rm)
    Abstract: The model developed in this paper explains differences in the division of labour across firmsas a result of computer technology adoption. We find that changes in the division of labourcan result both from reduced production time and from improved communicationpossibilities. The first shifts the division of labour towards a more generic structure, while thelatter enhances specialisation. Although there exists heterogeneity, our estimates for arepresentative sample of Dutch establishments in the period 1990-1996 suggest thatproductivity gains have been the main determinant for shifts in the division of labour withinmost firms. These productivity gains have induced skill upgrading, while in firms gainingmainly from improved communication possibilities specialisation increased and skillrequirements have fallen.
    Keywords: education, training and the labour market;
    Date: 2005
  7. By: Hermann Sautter
    Abstract: In order to qualify economic growth as “pro-poor”, at least per capita income-growth rates of the poor should be larger than the corresponding growth-rates of the non-poor resulting in a lower degree of distributional inequality. Measured in this sense, economic growth in South- Eastern Europe during the last 10-15 years was not pro-poor but pro-rich. Future growth can be changed towards the “pro-poor”-goal through a strategy with two “legs”: Stimulation of overall growth and specific programs to make economic growth “pro-poor”. Overall growth can be stimulated by good governance, macro-economic stability and the establishment of competitive markets. Specific programs should be focussed on sectors the poor work in (mainly agriculture), on regions the poor live in (mainly rural areas) and on the demand for factors the poor possess or are able to possess (labour). The paper discusses some elements of rural development, the possibilities of stimulating the demand for labour, and the necessary steps to improve the access of the poor to education and health-services. In addition to that, the problems of “pockets of poverty” are being discussed. A consistent strategy like this requires political decisiveness and administrative competence. It is hard to imagine that it can be materialized without giving the poor “voice” to influence the institutions and policies that affect their lives.
    Date: 2005–07–14
  8. By: Dholakia Ravindra H
    Abstract: In the present paper, we have examined trends in regional disparity in human and social development by considering numerous indicators other than State Income. We found no support to the general impression prevailing in the recent literature that disparity is increasing over the last two decades when we subjected the trend to statistical significance test. We considered numerous output as well as the input indicators for the purpose. In very few indicators, the disparity showed an increase, whereas in a large number of indicators it either remained the same or actually declined over the last two decades. The state governments’ efforts in the social sectors were perhaps a major reason for the outcome. Except education, in all other social sub-sectors, the interstate disparity in the government effort markedly declined during the 1990s compared to the 1980s. In education, it remained the same. Our findings in this paper point to a very clear policy prescription. The social and human development is considered by all the state governments as very important and a priority sector in their development strategy. The way they are making efforts in these directions is reducing disparity across states although each state has been acting on its own. This is perhaps because of the felt need of people and the polity in states. Explicit objective of reducing regional disparity in social and human development in the central planning may not, therefore, be specially required. Augmenting the revenue resources of states allowing the states to access public borrowings directly would enable most of them to concentrate on their priority areas – based on the local felt need. It is likely to address the issue of regional imbalance and disparity in a much better and efficient way without imposing excess burden since it would allow exploiting complementarities in growth and equity.
    Date: 2005–09–23
  9. By: Mothuri Venkatanarayana (Centre for Development Studies)
    Abstract: The emphasis on education assumes importance given the recent recognition of human capital, human rights and human development perspectives of development. Hence educational deprivation is recognised as the primary agent of human deprivation and all necessary measuresare required to ensure minimum education for every child. Such auniversal recognition emanates from the given magnitude of educationally deprived children all around the world. On this premise,this is an attempt at examining the levels and inequities associated withthe phenomenon of educational deprivation of children during 1990's in India. This exercise provides a detailed exposition of the household characteristics of the deprived children based on information obtained in National Sample Survey Organisation (NSSO). The persistence of educational deprivation among children in India is due to socio-economic deprivation in general; however, it remains debatable but whether the remedy lies in making the schooling provision universal. This paper argues that the provision may be necessary but not a sufficient condition to accomplish the dream goal of universal elementary education. Alternatively it argues for a greater role of the state to ensure the enabling conditions in the household domain; in otherwords, the state has the responsibility of ensuring the well-being of all children on an equal footing. The state's responsibility is of equal importance of that of the parents.
    Keywords: India, Deprivation, Educationally Deprived Children, Child Labour, Educational Inequalities, Group Inequalities
    JEL: I2 I20 I28 R12 J21 J23
    Date: 2005–07
  10. By: Joao Leitao (Universidade da Beira Interior); Ricardo Gouveia Rodrigues (Universidade da Beira Interior); Paulo Duarte (Universidade da Beira Interior)
    Abstract: An abrupt growth, in terms of the supply of marketing degrees in Portugal, has, recently, been observed, which has contributed for intensifying the concurrence between the institutions of undergraduate education. In this new competitive environment the development of a brand image associated with this kind of supply, is intended as a strategic variable for communicating with different targets. In this article, the different types of factors that contribute for the creation of the brand image of the institutions of undergraduate education, are presented, by highlighting the importance of the advertising push, for obtaining the desirable demand pull, which can be associated with the basic supply of undergraduate education, and with others upper educational degrees that are supplied by the same education institutions.
    Keywords: Advertising, Brand Image, Undergraduate Education.
    JEL: I21 M31 M37
    Date: 2005–09–26
  11. By: Luciano PILOTTI; Silvia Rita SEDITA
    Abstract: The aim of the paper is to find a framework for understanding dyn amics of the learning process at different levels, occurring thro ugh different forms of education. The purpose is to consider the impact of formal, informal, non-formal learning on firms’ perform ance. For sure R&D expenses and market are really important t o foster innovation and drive firms towards better performances, but they need to take place in a learning oriented environment. O ur target of analysis are micro and small firms learning processe s, which we look at using secondary data from different sources. The paper proceeds as follow. Firstly, the main aim of the work a nd research questions are presented, secondly, we focus on the re lationships between human capital and innovation in SMEs. Thirdly , we illustrate what we mean for learning, paying particular atte ntion to the differences between education and learning. Fourthly , we propose our interpretative framework, analysing in details i ts components.
    Keywords: Knowledge, learning, education, human capital, SMEs, LPSs, ICTs
  12. By: Prof. Purusottam Nayak (North-Eastern Hill University); Ms. M. Karmakar (Tripura University)
    Abstract: Education is the backbone of a country. Not only it plays a vital role in the life of every human being but also occupies an important place in the development process of a country, its growth and welfare. Even it is considered as one of the most important indicators of development in a country according to quality-of-life approach. It has become very crucial perhaps never more so in man’s history than today. In India the importance of education has been highlighted in the Constitution {Article 29(2), 45 and 46} which provide for free and compulsory education for all the children belonging to different sections of the society including scheduled caste, scheduled tribe and other backward communities. To fulfill this objective enshrined in the Constitution both the Central Government and the State Governments have taken keen interest in increasing the literacy rate in the country. As a result a considerable progress has been made over the last five decades. The present paper in this regard is an attempt to focus and analyze the rate of educational development in the State of Tripura and the wastage involved therein. For the purpose of analysis both primary and secondary data are used in this paper.
    Keywords: Educational Development and wastage
    JEL: A
    Date: 2005–09–23
  13. By: Michael Anderson (Massachusetts Institute of Technology Economics Department)
    Abstract: The view that the returns to public educational investments are highest for early childhood interventions stems primarily from several influential randomized trials - Abecedarian, Perry, and the Early Training Project - that point to super-normal returns to preschool interventions. This paper presents a de novo analysis of these experiments, focusing on core issues that have received little attention in previous analyses: treatment effect heterogeneity, over-rejection of the null hypothesis due to multiple inference, and robustness of the findings to attrition and deviations from the experimental protocol. The primary finding of this reanalysis is that girls garnered substantial short- and long-term benefits from the interventions, particularly in the domain of total years of education. However, there were no significant long-term benefits for boys. These conclusions change little when allowance is made for attrition and possible violations of random assignment.
    Keywords: preschool early intervention human capital education treatment effects
    JEL: I20 I21 I29 J13
    Date: 2005–09–25
  14. By: Mihails Hazans (University of Latvia & BICEPS)
    Abstract: This paper shows that in the Baltic countries, commuting reduces urban- rural wage and employment disparities and increases national output. To quantify the effect of commuting on wage differentials, two sets of earnings functions are estimated (based on Estonian, Latvian, and Lithuanian Labor Force Surveys) with location variables (capital city, rural, etc.) measured at the workplace and at the place of residence. We find that the ceteris paribus wage gap between capital city and rural areas, as well as between capital and other cities is significantly narrowed by commuting in some cases but remains almost unchanged in other. Different outcomes are explained by country-specific spatial patterns of commuting, educational and occupational composition of commuting flows, and presence or absence of wage discrimination against rural residents in urban markets. A treatment effects model is used to estimate individual wage gains to rural—urban or inter-city commuting; these gains are substantial in most but not all cases. Wage effects of commuting distance, as well as impact of education, gender, ethnicity, and local labor market conditions on the commuting decision are also explored.
    Keywords: commuting, wage disparities, earnings functions, Baltic countries
    JEL: J31 J61 P52 R12 R23
    Date: 2005–09–29
  15. By: Matthew Higgins (Georgia Institute of Technology); Daniel Levy (Bar-Ilan University); Andrew Young (University of Mississippi)
    Abstract: We use U.S. county data (3,058 observations) and 41 conditioning variables to study growth and convergence. Using OLS and 3SLS-IV we report on the full sample and metro, non-metro, and 5 regional samples: (1) OLS yields convergence rates around 2 percent; 3SLS yields 6–8 percent; (2) convergence rates vary (e.g., the Southern rate is 2.5 times the Northeastern rate); (3) federal, state and local government negatively correlates with growth; (4) the relationship between educational attainment and growth is nonlinear; and (5) finance, insurance & real estate industry and entertainment industry positively correlates with growth while education employment negatively correlates.
    Keywords: Economic Growth, Conditional Convergence, County-Level Data
    JEL: O40 O11 O18 O51 R11 H50 H70
    Date: 2005–09–22
  16. By: Gustav Papanek (Boston University); Oldrich Kyn (Boston University)
    Abstract: Empirical study, using regression analysis of the combined cross-section and time series data for 83 countries. The following hypotheses are tested: (1) The Kuznets Curve does not exist. That is, the level of per capita income has no effect on income distribution, once other relevant factors are taken into account. (2) Even if the Kuznets Curve exists, the relationship between per capita income and income distribution is not stable over time. (3) Differences in socio-political systems are much more important than per capita income in explaining cross-country variations in income distribution. It will be more egalitarian in countries that are Communist, or suffer extensive government intervention in the economy, or have no dualistic socio-political structure. (4) Spread of education leads to greater income equality. (5) Rate of growth does not affect income distribution. (6) Structure of the economy, especially the relative importance of primary and manufactured exports, is a major factor in income distribution. (7) There are no systematic differences in income distribution among the major regions of the world, once such explanatory variables as socio-political systems or education are included in the analysis.
    Keywords: Income Distribution, Economic Inequality, Kuznets Curve
    JEL: P Q Z
    Date: 2005–09–24
  17. By: Sarmistha Pal (Department of Economics & Finance, Brunel University); Sugata Ghosh (Department of Economics & Finance, Brunel University)
    Abstract: Despite more than four decades of planning efforts with an emphasis on balanced regional development, inter- and intra-state disparities in key indicators of quality of life in India are striking. Using Indian state- level data for the period 1960-92, the present paper examines the nature of political economy of elite dominance and ethnic heterogeneity, both of which could in principle be responsibel for lower the provision of public services. Fixed–effects panel data estimates seem to confirm that (a) greater degree of elite dominance lowers the spending on education (but not that on health) while greater degree of ethnic heterogeneity lowers spending on both health and education. (b) Also, predominance of Indian National Congress regime has been higher in states with greater dominance of elite upper class and ethnic heterogeneity. Thus there is a close correspondence between political regimes and social development spending in the sample states though there is a clear lack of convergence in state spending on health and education suggesting the divergent agenda of the state governments in India.
    Keywords: Social development, Minority groups, Elite dominance, Ethnic heterogeneity.
    JEL: I18 I28
    Date: 2005–09–27
  18. By: Jesús Fernández-Huertas Moraga (Columbia University, Department of Economics, 420 West 118th Street, New York, NY 10027, USA.); Jean-Pierre Vidal (European Central Bank, Kaiserstrasse 29, D-60311, Frankfurt am Main, Germany.)
    Abstract: This paper investigates fiscal sustainability in an overlapping generations economy with endogenous growth coming from human capital formation through educational spending. We assess how budgetary imbalances affect economic dynamics and the outlook for economic growth, thereby providing a rationale for fiscal rules ensuring sustainability. Our results show that the appropriate response of fiscal policy to temporary shocks is not trivial in the absence of fiscal rules. Fiscal rules allow for a timely reaction, thereby avoiding possibly disruptive fiscal adjustment in the future: the more adjustment is delayed, the larger is its necessary scale. We perform a rough calibration of the model to simulate the effects of a demographic shock (change in the population growth rate) under different fiscal policy scenarios.
    Keywords: Fiscal sustainability; public debt; overlapping generations.
    JEL: E62 H63 H55 O41 E17
    Date: 2004–10
  19. By: Véronique Genre; Ramón Gómez Salvador; Ana Lamo (Corresponding author: European Central Bank, Directorate General Research, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.)
    Abstract: This paper provides an empirical study of the determinants of female participation decisions in the European Union. The analysis is performed by estimating participation equations for different age groups (i.e. young, prime-age and older females), using annual data for a panel of 12 EU-15 countries over the period 1980- 2000. Our findings show that the strictness of labour market institutions negatively affects the participation rate. Decisions linked to individual preferences with regards to education or fertility are also found relevant to participation of the youngest and prime-age females respectively. The inclusion of a proxy to capture cohort effects is crucial in order to explain the oldest females’ participation.
    Keywords: Labour force participation; labour market institutions.
    JEL: J21
    Date: 2005–03
  20. By: António Afonso (European Central Bank, Kaiserstraße 29, D-60311 Frankfurt am Main, Germany and ISEG/UTL - Technical University of Lisbon; CISEP – Research Centre on the Portuguese Economy, R. Miguel Lupi 20, 1249-078 Lisbon, Portugal); Miguel St. Aubyn (ISEG/UTL - Technical University of Lisbon; UECE – Research Unit on Complexity in Economics, R.Miguel Lupi 20, 1249-078 Lisbon, Portugal)
    Abstract: We address the efficiency of expenditure in education provision by comparing the output (PISA results) from the educational system of 25, mostly OECD, countries with resources employed (teachers per student, time spent at school). We estimate a semi-parametric model of the education production process using a two-stage procedure. By regressing data envelopment analysis output scores on nondiscretionary variables, both using Tobit and a single and double bootstrap procedure, we show that inefficiency is strongly related to GDP per head and adult educational attainment.
    Keywords: Education; technical efficiency; DEA; bootstrap; semi-parametric.
    JEL: C14 C61 H52 I21
    Date: 2005–06

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