nep-edu New Economics Papers
on Education
Issue of 2005‒10‒29
twelve papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Entrepreneurial engagement levels in the European Union By Isabel Grilo; Roy Thurik
  4. Demographic and Education Effects on Unemployment in Europe: Economic Factors and Labour Market Institutions By Federico Biagi; Claudio Lucifora
  5. Introducing Time-to-Educate in a Job Search Model By Sascha O. Becker
  6. Two recent (2003) international surveys of schooling at attainments: England’s problem By Sig Prais
  7. The Labour Market Effects of Alma Mater: Evidence from Italy By Giorgio Brunello; Lorenzo Cappellari
  8. To what extent fuzzy set theory and structural equation modelling can measure functionings? An application to child well being By Tindara Addabbo; Maria Laura Di Tommaso; Gisella Facchinetti
  9. Skilled Emigration, Business Networks and Foreign Direct Investment By Kugler, Maurice; Rapoport, Hillel
  10. Increases in Female Labour Force Participation in Europe: Similarities and Differences By Jan Dirk Vlasblom; Joop J. Schippers
  11. Measurement Error in Education and Growth Regressions By Miguel Portela; Coen Teulings; Rob Alessie
  12. Skills and Creativity in a Cross-section of Dutch Cities By Gerard Marlet; Clemens van Woerkens

  1. By: Isabel Grilo; Roy Thurik
    Abstract: A multinomial logit model and survey data from the 25 EU member states and the US are used to establish the effect of demographic and other variables on various entrepreneurial engagement levels. These engagement levels range from "never thought about starting a business" to "thinking about it", "taking steps for starting up", "having a young business", "having an older business" and "no longer being an entrepreneur". Data of the 2004 Entrepreneurship Flash Eurobarometer survey containing over 13,500 ob-servations is used. Other than demographic variables such as gender, age, education level and whether par-ents are self-employed, the set of explanatory variables used includes country specific effects, measures of risk tolerance, internal and external locus of control and four perceptions of 'obstacles'. The 'obstacle' vari-ables include the perception by respondents of administrative complexities, of availability of financial sup-port, of accessibility of information for start-up and whether the current economic climate is favorable. Among the four perception variables only administrative complexities displays an unambiguous obstacle profile in that its presence has a significant negative impact on higher entrepreneurial engagement levels. Country effects suggest a clear underperformance of Europe relative to the US in less mature entrepreneu-rial phases.
    Keywords: determinants of entrepreneurship, nascent entrepreneurship, multinomial logit, barriers to entry, Europe
    JEL: M13 H10 J23 R12
    Date: 2005–10
  2. By: Jorge Higinio Maldonado
    Abstract: Increased access to education will be key in any efforts to improve the quality of rural life and the welfare of the next generation in developing countries. Microfinance programshave been among components of strategies for poverty alleviation that have attempted to address this challenge. This essay uses data from three different surveys of households of clients of microfinance Organizations (MFOs) in Bolivia to examine several channels through which microfinance may exert an influence on Education outcomes. Five channels are identified, designated as income, risk-management, child-labor demand, gender, and information effects. Based on an econometric specification that explains schooling decisions at the household level, regression models are used to examine determinants of education achievements and to make inferences about the potential influence of microfinance, through these channels, on those achievements. The results challenge usual assumptions in microfinance programs. In particular, for some ranges of household income and some types of borrowers, access to loans has conflicting effects on school enrollment. On the one hand, loans increase the demand for education as a result of income, risk-management, gender, and information effects. On the other hand, credit-constrained households that cultivate land or operate labor-intensive microenterprises discover new demands for child labor, either for farming, working in the microenterprise, or taking care of siblings while the mothers operate the new or expanded business. Significant program and policy consequences are derived from these paradoxical results.
    Keywords: microfinance
    JEL: C25
    Date: 2005–08–10
  3. By: Sarbajit Chaudhuri (Dept. of Economics, Calcutta University, India); Ujjaini Mukhopadhyay (Dept. of Economics, Calcutta University, India)
    Abstract: The paper purports to examine the implications of a free education policy and trade liberalization on the child and adult labour markets in the set-up of a Harris-Todaro type general equilibrium model. It has been found that a hike in the education subsidy or inflow of foreign capital may produce counterproductive results on the supply of child labour in the urban area. Moreover, these policies mar raise the level of urban unemployment of adult labour even when two types of labour are not substitutes to each other. The average income of the urban poor families may also decrease as a consequence.
    Keywords: Child labour, urban unemployment of adult labour, general equilibrium, education subsidy, trade liberalization
    JEL: F10 J10 J13 I28
    Date: 2005–10–23
  4. By: Federico Biagi (Università di Padova and SDA Bocconi); Claudio Lucifora (Università Cattolica, FEEM, CEPR and IZA Bonn)
    Abstract: We analyse the effects of demographic and education changes on unemployment rates in Europe. Using a panel of European countries for the 1980-2000 period - disaggregated by cohort, gender and education -, we empirically test the economic effects of two stylised facts that have occurred in recent decades: the "baby bust" and the "education boom". We find that structural shifts in the population age structure play an important role and that a lot of variation is also attributable to educational changes, the latter usually neglected in aggregate studies. Results show that demographic and education shocks are qualitatively different for young (adult) workers as well as for more (less) educated people. While adult workers and more educated individuals, in general, experience lower unemployment rates, changes in the population age structure appear to be positively related to young workers’ unemployment rates while they have no effect on adults. Conversely changes in the skill structure ("education boom"), even when controlling for skill-biased technological change, reduce the unemployment of the more educated. Labour market institutions also influence unemployment rates in different ways. Unemployment benefits are found to have a positive impact on unemployment, while bargaining coordination and employment protection reduce it.
    Keywords: unemployment, demographic, education, labour market institutions
    JEL: E24 J31 J51 J65
    Date: 2005–10
  5. By: Sascha O. Becker (CES, CESifo and IZA Bonn)
    Abstract: Transition patterns from school to work differ considerably across OECD countries. Some countries exhibit high youth unemployment rates, which can be considered an indicator of the difficulty facing young people trying to integrate into the labor market. At the same time, education is a time-consuming process, and enrolment and dropout decisions depend on expected duration of studies, as well as on job prospects with and without completed degrees. One way to model entry into the labor market is by means of job search models, where the job arrival hazard is a key parameter in capturing the ease or difficulty in finding a job. Standard models of job search and education assume that skills can be upgraded instantaneously (and mostly in the form of on-the-job training) at a fixed cost. This paper models education as a time-consuming process, a concept which we call time-to-educate, during which an individual faces the trade-off between continuing education and taking up a job.
    Keywords: job search, education, enrollment, dropouts
    JEL: E24 J31 J41 J64
    Date: 2005–10
  6. By: Sig Prais
    Abstract: The two recent (2003) international surveys of pupils’ attainments were uncoordinated, overlapped considerably, were costly and wasteful, especially from the point of view of England where inadequate response-rates meant that no reliable comparisons at all could be made with other countries. Sources of the problem are investigated in this paper and suggestions made for improvements in possible future surveys.
    Date: 2005–06
  7. By: Giorgio Brunello; Lorenzo Cappellari
    Abstract: We use data from a nationally representative survey of Italian graduates to study whether Alma Mater matters for employment and earnings three years after graduation. We find that the attended college does matter, and that college related differences are substantial both among and within regions of the country. However, these differences are not large enough to trigger substantial mobility flows from poorly performing to better performing institutions. There is also evidence that going to a private university pays off at least in the early part of a career: the employment weighted college wage gains from going to a private college are close to 18 percent. Only part of this gain can be explained by the fact that private universities have lower pupil - teacher ratios than public institutions. household behavior.
    Keywords: college education, Italy
    JEL: J24 J1
    Date: 2005–04
  8. By: Tindara Addabbo; Maria Laura Di Tommaso; Gisella Facchinetti
    Abstract: This paper explores the possibilities of using fuzzy inference system and structural equation modelling to measure capabilities both at a theoretical and empirical level. Fuzzy set theory has been already used to measure functionings (Chiappero Martinetti 1996, 2000, Lelli 2001) while structural equation modelling has not been used till now (apart from some preliminary results on children well being in India presented by Di Tommaso 2003). In this paper we outline the major advantages and disadvantages of both the approaches both in terms of the statistical assumptions implied and in terms of their ability to measure functionings. Are the statistical assumptions implied by these approaches compatible with the capability approach? What limitations the statistical assumptions impose to the capability approach? In order to assess to what extent these two statistical techniques work, we will apply them to measure child well being with a capabilities approach. The aim is also how to propose a list of capabilities with reference to children well being in Italy. The applied part of the paper will use a data set based on a ISTAT (Italian National Statistical Office) multipurpose survey on family and on children condition in Italy to recover information on children’s education, the sociodemographic structure of their families, child care provided by relatives and parents according to the type of activities in which the children are involved. In the conclusion of the paper, we outline if and to what extent these statistical and fuzzy techniques can be used to measure functionings with special reference to child well being.
    Keywords: equation, modelling, fuzzy, inference
    JEL: J0 C5
    Date: 2004–09
  9. By: Kugler, Maurice; Rapoport, Hillel
    Abstract: In a global context foreign direct investment (FDI) and migration substitute one another in the matching process between workers and firms. However, as labor flows can lead to the formation of business networks, migration can actually facilitate FDI in the long-run. We first present a stylized model for a small open economy illustrating these offsetting effects. We then use U.S. data on bilateral labor inflows and capital outflows to measure the extent of contemporaneous substitutability and dynamic complementarity between migration and FDI. We find that brain drain and FDI inflows are negatively correlated contemporaneously but that skilled migration is associated with future increases in FDI inflows. We also find suggestive evidence of substitutability between current migration and FDI for migrants with secondary education, and of complementarity between past migration and FDI for unskilled migrants.
    Keywords: Brain drain, foreign direct investment inflows, migrant ties and business networks JEL Codes: F22, F43, O41
    Date: 2005–03–01
  10. By: Jan Dirk Vlasblom; Joop J. Schippers
    Abstract: Low educational levels and the effect of children are recognized as the most important factor for low female participation rates. Over the last decades, female labour supply in Europe has shown a large increase. This may be the result of changes in the level of education or fertility. It is also possible that it is due to changes in behaviour, as influenced by the social and institutional context. Our results show that increases in participation rates cannot be explained by changes in either educational level or the number and timing of children. Female labour supply increases for all educational levels and for both women with and without children. In other words, it is mainly changes in behaviour driving the increase in participation rates over the last decades.
    Keywords: female labour supply
    JEL: J22
    Date: 2004–03
  11. By: Miguel Portela; Coen Teulings; Rob Alessie
    Abstract: The perpetual inventory method used for the construction of education data per country leads to systematic measurement error. This paper analyses the effect of this measurement error on GDP regressions. There is a systematic difference in the education level between census data and observations constructed from enrolment data. We discuss a methodology for correcting the measurement error. The standard attenuation bias suggests that using these corrected data would lead to a higher coe.cient. Our regressions reveal the opposite. We discuss why the measurement error yields an overestimation. Our analysis contributes to an explanation of the difference between regressions based on 5 and on 10 year first--differences.
    Keywords: growth, education, measurement error
    JEL: I2 O4
    Date: 2004–04
  12. By: Gerard Marlet; Clemens van Woerkens
    Abstract: In this paper we examine Richard Florida's Creative Capital theory in comparison with Human Capital theory, using a cross section of Dutch cities as our sample. Employment growth in Dutch cities can be predicted both from local education levels and from the presence of a large creative class, but especially from the latter. We conclude that in theory creativity is not very different from human capital. Nevertheless Florida's creative class is a better standard to measure human capital then education is.
    Keywords: human capital, creative class, urban growth.
    Date: 2004–10

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