nep-edu New Economics Papers
on Education
Issue of 2005‒10‒22
fourteen papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Variations in the Wage Returns to a First Degree: Evidence from the British Cohort Study 1970 By Massimiliano Bratti; Robin Naylor; Jeremy Smith
  2. Dimensions of Land Inequality and Economic Development By Lennart Erickson; Dietrich Vollrath
  3. The Distributional Bias of Public Education: Causes and Consequences By Mark Gradstein; Era Dabla-Norris
  4. Returns to Graduate and Professional Education: The Roles of Mathematical and Verbal Skills by Major By Song, Moohoun; Orazem, Peter
  5. How Important Is Homeland Education for Refugees' Economic Position in The Netherlands? By Joop Hartog; Aslan Zorlu
  6. Educational Qualifications and Wage Inequality: Evidence for Europe By Santiago Budría; Pedro Telhado Pereira
  7. Doctor Who? Who Gets Admission Offers in UK Medical Schools By Wiji Arulampalam; Robin A. Naylor; Jeremy Smith
  8. High Skilled Immigration in the International Arena By Barry R. Chiswick;
  9. The Division of Labor by New Parents: Does Child Gender Matter? By Shelly Lundberg
  10. Birth Order, Educational Attainment and Earnings: An Investigation Using the PSID By Jasmin Kantarevic; Stéphane Mechoulan
  11. To Study or to Work? Education and Labour Market Participation of Young People in Poland By Francesco Pastore
  12. Job Market Signaling and Screening: An Experimental Comparison By Dorothea Kübler; Wieland Müller; Hans-Theo Normann
  13. The Effect of Education Subsidies in an Aging Economy By Megumi Mochida
  14. Human Capital and the Ambiguity of the Mankiw-Romer-Weil Model. By T. Huw Edwards

  1. By: Massimiliano Bratti (University of Milan); Robin Naylor (University of Warwick); Jeremy Smith (University of Warwick)
    Abstract: As in many other countries, government policy in the UK has the objective of raising the participation rate of young people in higher education, while increasing the share of the costs of higher education paid by students themselves. A rationale for the latter element comes from evidence of a high private return to university undergraduate degrees. However, much of this evidence pre-dates the rapid expansion in the graduate population. In the current paper, we use evidence from a cohort of young people born in Britain in 1970 to update influential evidence on returns to a first degree based on a previous 1958 birth cohort. We also analyse variations in returns by degree subject and by class of degree. Our analysis incorporates proxying and matching, control function and propensity score matching methods. Among other results, we find (i) that the returns to a first degree for men changed very little across the two cohorts while the return for women declined substantially and (ii) evidence of differences in returns to a first degree according to subject area of study and class of degree awarded.
    Keywords: degree, return, subject, UK, university,
    Date: 2005–06–20
  2. By: Lennart Erickson; Dietrich Vollrath
    Abstract: There are several theories linking land inequality with aspects of economic development. Empirical work on these theories has attempted to establish a relationship between land inequality and institutions, financial development, and education. This research, though, has relied on measures of land inequality that capture only inequality within the class of landholders, ignoring completely the issue of landlessness. This omission raises suspicion about the usefulness of those empirical results. We use a new measure of the breadth of landholdings across the agricultural population to address this issue. We test the proposed relationships regarding land inequality and development using the new measure. The regressions fail to find significant and robust relationships between land inequality of either type and institutions or financial development. We do find that lower land inequality across agricultural populations, but not inequality within the landholding class, is associated with greater public provision of education.
    Keywords: Land reform , Development , Financial sector , Education ,
    Date: 2004–09–02
  3. By: Mark Gradstein; Era Dabla-Norris
    Abstract: While public education is often intended to be progressive in its effects on income distribution, in reality its incidence is often skewed toward the rich. This paper argues that the extent of this bias is directly related to institutional weaknesses in governance. We present a simple dynamic model where weak governing institutions allow the rich to be more effective in appropriating a larger share of public education spending thereby preventing inequality reduction. The empirical part provides tentative support for this view, showing that the progressiveness of public education spending is related to the strength of governance.
    Keywords: Education , Governance ,
    Date: 2004–11–30
  4. By: Song, Moohoun; Orazem, Peter
    Abstract: Students in majors with higher average quantitative GRE scores are less likely to attend graduate school while students in majors with higher average verbal GRE scores are more likely to attend graduate school. This sorting effect means that students whose cognitive skills are associated with lower earnings at the bachelor’s level are the most likely to attend graduate school. As a result, there is a substantial downward bias in estimated returns to graduate education. Correcting for the sorting effect raises estimated annualized returns to a Master’s or doctoral degree from about 5% to 14.5% and 12.6% respectively. Estimated returns to professional degrees rise from 14% to 20%. These findings correspond to a large increase in relative earnings received by post graduate degree holders in the United States over the past 20 years.
    Keywords: Phd degree, Master's degree, Professional degree, GRE, Returns, Graduate Education, sorting, verbal ability, mathematics ability
    JEL: J3
    Date: 2005–10–12
  5. By: Joop Hartog (AIAS, University of Amsterdam and IZA Bonn); Aslan Zorlu (AIAS, University of Amsterdam)
    Abstract: We use data on refugees admitted to the Netherlands that include registration of education in their homeland by immigration officers. Such data are seldom available. We investigate the quality and reliability of the registrations and then use them to assess effects on refugees’ economic position during the first five years after arrival. The most remarkable finding is the absence of returns to higher education.
    Keywords: immigrants, refugees, education, earnings, employment
    JEL: I21 J31 J61
    Date: 2005–09
  6. By: Santiago Budría (University of Madeira and CEEAplA); Pedro Telhado Pereira (University of Madeira, CEEAplA, CEPR and IZA Bonn)
    Abstract: This paper explores the connection between education and wage inequality in nine European countries. We exploit the quantile regression technique to calculate returns to lower secondary, upper secondary and tertiary education at different points of the wage distribution. We find that returns to tertiary education are highly increasing when moving from the lower to the upper quantiles. This finding suggests that an educational expansion towards tertiary education is expected, ceteris paribus, to increase overall wage inequality through the withindimension. Returns to secondary education are more homogeneous across quantiles, thus suggesting that an educational expansion towards secondary education is expected to have a more limited impact on within-groups dispersion. Using data from the last decades, we assess how the impact of education on wage inequality has evolved over time. We detect different trends across countries. A common feature is that the inequality increasing effect of tertiary education became more acute over the last years.
    Keywords: returns to education, quantile regression, wage inequality
    JEL: C29 D31 I21
    Date: 2005–09
  7. By: Wiji Arulampalam (University of Warwick and IZA Bonn); Robin A. Naylor (University of Warwick); Jeremy Smith (University of Warwick)
    Abstract: In the context of the UK Government’s ambitious programme of medical school expansion, it is important to have an understanding of how the medical school admissions process works, and with what effects. The issue is also relevant for the Schwartz Review (2004) into higher education admissions. Using individual-level data for two entire cohorts of medical student applicants in UK universities and exploiting the panel structure of the applicant-medical school information, we estimate models to analyse the probability that an individual student receives an offer of a place. We find that prior qualifications, school type, gender, age, social class and ethnic background are major influences on whether a student receives an offer from a medical school. We also find that the probability of receiving an offer from a particular medical school is influenced by the identity of other medical schools applied to. Finally, we find evidence that certain groups of applicants are particularly disadvantaged the later they apply within the application process.
    Keywords: medical students, admissions, offer (non-rejection) probabilities, endogenous selection, unobserved heterogeneity
    JEL: J24 I2 C41
    Date: 2005–09
  8. By: Barry R. Chiswick (University of Illinois at Chicago and IZA Bonn);
    Abstract: This conceptual paper, prepared for a United Nations Expert Group Meeting on Migration and Development, is concerned with the international mobility of high-skilled workers, previously referred to as the "brain drain". After discussing the historical background of high-skilled international migration, the paper examines the reasons for the recent growth in demand for high-skilled workers in the technologically advanced nations. If then examines the impact of high-skilled migration on the level and distribution of income in the destinations. The causes and consequences of high-skilled emigration from the perspective of the origins or sending countries are examined. Educational finance and taxing policies that encourage emigration, emigrant remittances, and the "brain gain" from returning emigrants are discussed. Alternative public policies are considered.
    Keywords: immigration, high skilled workers, economic development
    JEL: F22 J61 J31 O15
    Date: 2005–09
  9. By: Shelly Lundberg (University of Washington and IZA Bonn)
    Abstract: This paper documents some distinct and surprising patterns of specialization among new parents in the NLSY79. Child gender has significant effects on the labor supply of both mothers and father, and these effects are opposite at the two ends of the education spectrum - boys reduce specialization among the college-educated and increase specialization among parents with less than a high school education. Estimates from the recent American Time Use Survey are generally consistent with the NLSY79 findings, and indicate that highlyeducated parents devote more childcare time to young sons. The labor supply results are inconsistent with previous research that found boys substantially increase the work hours of their fathers relative to girls but have no effect on mother’s work hours. Possible explanations for the heterogeneous responses to sons and daughters across education groups include a bias towards same-sex parental inputs as desired child quality increases and child gender effects on the relative bargaining power of the mother and father. No evidence of improved maternal bargaining power can be found in the leisure consumption of mothers of young sons in the ATUS, but patterns in parental childcare time suggest gender differences in child production functions.
    Keywords: child gender, parenthood, labor supply, time allocation, specialization
    JEL: J22 J12 J13 J16
    Date: 2005–09
  10. By: Jasmin Kantarevic (Ontario Medical Association and IZA Bonn); Stéphane Mechoulan (University of Toronto)
    Abstract: Whether siblings of specific birth order perform differently has been a longstanding open empirical question. We use the family tree structure of the PSID to examine two claims found in the literature: whether being early in the birth order implies a distinct educational advantage, and whether there exists, within large families, a pattern of falling then rising attainment with respect to birth order, to the point where it becomes best to be last-born. Drawing from OLS and family fixed effects estimations, we find that being first-born confers a significant educational advantage that persists when considering earnings; being last-born confers none.
    Keywords: birth order, family size, education
    JEL: I2 J1
    Date: 2005–09
  11. By: Francesco Pastore (Seconda Università di Napoli and IZA Bonn)
    Abstract: This paper proposes Heckprobit estimates of the determinants of labour market participation of a sample of young (15-30) Poles, controlling for the sample selection bias caused by excluding those in education. There is evidence of sample selection bias in the case of young men, suggesting that they obey more than women to economic factors in making their educational choices. Education is an important determinant of the success in the labour market. The instrumental variables used in the selection equation - the local unemployment rate, expected lifetime earnings and the opportunity cost of education - have a statistically significant impact on the probability to be in education. In contrast with several previous studies relative to mature market economies, in high unemployment voivodships young people prefer to seek a job, rather than studying. In turn, this contributes to make regional unemployment persistent.
    Keywords: youth unemployment, education, heckprobit, Lisbon strategy, Poland
    JEL: C35 I2 J24 P3 P52
    Date: 2005–10
  12. By: Dorothea Kübler (Technical University Berlin and IZA Bonn); Wieland Müller (Tilburg University); Hans-Theo Normann (Royal Holloway, University of London)
    Abstract: We analyze the Spence education game in experimental markets. We compare a signaling and a screening variant, and we analyze the effect of increasing the number of competing employers from two to three. In all treatments, more efficient workers invest more often in education and employers offer higher wages for workers who have invested. However, separation is incomplete, e.g., investment does not pay on average for efficient worker types. Increased competition leads to higher wages in the signaling sessions, not with screening. In the signaling version, we observe significantly more separating outcomes than in the screening version of the game.
    Keywords: job-market signaling, job-market screening, sorting, Bayesian games, experiments
    JEL: C35 I2 J24 P3 P52
    Date: 2005–10
  13. By: Megumi Mochida (Graduate School of Economics, Osaka University)
    Abstract: We examine how an introduction of education subsidies affects growth rates, incorporating an uncertain lifetime. We demonstrate that the introduction of subsidies engenders higher growth rates in aging economies, except when the education-tax rate is sufficiently low.
    Keywords: Education subsidies; Social security; Uncertain lifetime
    JEL: H31 H52 H55
    Date: 2005–10
  14. By: T. Huw Edwards (Loughborough University)
    Abstract: Mankiw, Romer and Weil's (1992) finding of a cross-country relationship between savings rates, school enrolment and income levels is highly ambiguous. Their in- terpretation that it is consistent with an augmented Solow model depends on the implausible assumption that educational productivity is vastly higher in advanced countries than poor ones. On the alternative assumption of constant educational productivity, their model is very close to an AK-type, but with rising educational costs producing a degree of conditional convergence.
    Keywords: Growth, human capital, endogenous growth.
    JEL: O11 O41
    Date: 2004–12

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