nep-edu New Economics Papers
on Education
Issue of 2006‒01‒01
eleven papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Remedying Education: Evidence from Two Randomized Experiments in India By Abhijit Banerjee; Shawn Cole; Esther Duflo; Leigh Linden
  2. Causality, causality, causality: the view of education inputs and outputs from economics By Lisa Barrow; Cecilia Elena Rouse
  3. Is formal lifelong learning a profitable investment for all of life ? How age, education level, and flexibility of provision affect rates of return to adult education in Colombia By Blom, Andreas; Sohnesen, Thomas Pave
  4. Do Institutions of Direct Democracy Tame the Leviathan? Swiss Evidence on the Structure of Expenditure for Public Education. By Justina A.V. Fischer
  5. Wage determination in Northeast Brazil By Verner, Dorte
  6. Monitoring Works: Getting Teachers to Come to School By Esther Duflo; Rema Hanna
  7. Grading in Games of Status: Marking Exams and Setting Wages By Pradeep Dubey; John Geanakoplos
  8. Mexico : human capital effects on wages and productivity By Rubio, Marcela; Tinajero, Monica; López-Acevedo, Gladys
  9. Disability, poverty, and schooling in developing countries : results from 11 household surveys By Filmer, Deon
  10. Economic policy from an evolutionary perspective: the case of Finland By Ron A. Boschma; Markku Sotarauta
  11. The changing pattern of wage growth for low skilled workers By Eric French; Bhashkar Mazumder; Christopher Taber

  1. By: Abhijit Banerjee; Shawn Cole; Esther Duflo; Leigh Linden
    Abstract: Many efforts to improve school quality by adding school resources have proven to be ineffective. This paper presents the results of two experiments conducted in Mumbai and Vadodara, India, designed to evaluate ways to improve the quality of education in urban slums. A remedial education program hired young women from the community to teach basic literacy and numeracy skills to children lagging behind in government schools. We find the program to be very effective: it increased average test scores of all children in treatment schools by 0.14 standard deviations in the first year, and 0.28 in the second year, relative to comparison schools. A computer-assisted learning program provided each child in the fourth grade with two hours of shared computer time per week, in which students played educational games that reinforced mathematics skills. The program was also very effective, increasing math scores by 0.35 standard deviations the first year, and 0.47 the second year. These results were not limited to the period in which students received assistance, but persisted for at least one year after leaving the program. Two instrumental variable strategies suggest that while remedial education benefited the children who attended the remedial classes, their classmates, who did not attend the remedial courses but did experience smaller classes, did not post gains, confirming that resources alone may not be sufficient to improve outcomes.
    JEL: O11 I21
    Date: 2005–12
  2. By: Lisa Barrow; Cecilia Elena Rouse
    Abstract: Educators and policy makers are increasingly intent on using scientifically-based evidence when making decisions about education policy. Thus, education research today must necessarily be focused on identifying the causal relationships between education inputs and student outcomes. In this paper we discuss methodologies for estimating the causal effect of resources on education outcomes; we also review what we believe to be the best evidence from economics on a few important inputs: spending, class size, teacher quality, the length of the school year, and technology. We conclude that while the number of papers using credible identification strategies is thin, the body of credible research on causal relationships is growing, and we have started to gather evidence that some school inputs matter while others do not.
    Keywords: Education - Economic aspects ; Technology - Economic aspects
    Date: 2005
  3. By: Blom, Andreas; Sohnesen, Thomas Pave
    Abstract: Lifelong learning is increasingly being recognized as a primary factor for knowledge diffusion and productivity growth. However, little economic evidence exists on the economic value of lifelong learning for the individual, especially in developing countries. This paper contributes to remedy this shortfall. It investigates one aspect of lifelong learning: returns to formal education across ages. In the absence of long-term longitudinal data, the paper estimates rates of return for simulated re-entry into the education system. The estimations use the method of internal rate of return and are based on observed education-age-earnings profiles from the Colombian national household survey. It finds that rates of return to all levels of education are only slightly smaller for 35 year olds than for young people, thus confirming the profitability of investment in adult education. Tertiary education continues to attract a positive return until late in life, 45-50 years, whereas the economic value of re-entering primary and secondary education is positive up till the age of 40-45. So, formal lifelong learning seems to remain a profitable investment for at least half of life. But lack of part-time work, high tuition fees, and prolonged study time reduce the return. The findings suggest that adult formal education initiatives should focus on the 20 to 40 year olds and be designed flexibly to allow learners to work part time.
    Keywords: Access & Equity in Basic Education,Teaching and Learning,Gender and Education,Primary Education,Tertiary Education
    Date: 2005–12–01
  4. By: Justina A.V. Fischer
    Abstract: Identification of a deleterious impact of institutions of direct legislation on student performance by studies for both the U.S. and Switzerland has raised the question of the exact transmission channels for this impact. Studies for the U.S. that find an increase in the ratio of administrative to instructional spending and larger class sizes support the hypothesis of a Leviathan-like school administration. However, research for Switzerland using a time-series panel of sub-federal school expenditure and class size detects no such effect. These findings are in line with previous analyses that identify efficiency gains in the provision of public goods for Switzerland. Version: 7 Dec 2005
    JEL: H72 H41 I22
    Date: 2005–12
  5. By: Verner, Dorte
    Abstract: The author analyzes the labor markets in the Northeast region of Brazil that includes Pernambuco, Bahia, and Ceará states. Her findings show a rather heterogeneous impact pattern of individual characteristics on monthly wages across the wage distribution. That is, the magnitude of the effect of a wage determinant is different depending on whether the worker is placed in the lower, median, or top of the wage distribution. The findings reveal that basic schooling matters for all four geographical areas and across the income distribution. However, poor workers are awarded lower returns than their richer peers, and in Bahia and Ceará, the poor do not obtain any returns to basic schooling. Furthermore, the impact of 5-8 or 9-11 years of education is larger than that of 1-4 years of completed education. The returns obtained by a median worker are higher in Ceará and Pernambuco than in Bahia. Finally, completed tertiary education offers the largest returns of all levels of education. The median worker receives a premium of 105, 249, and 216 percent in Ceará, Pernambuco, and Bahia, respectively. Hence, one direct policy implication is to increase the quality of education, in particular in poorer neighborhoods. Experience impacts positively on wages and it increases with age until workers reach 50 years of age. However, returns to experience are falling significantly across the wage distribution. For the poor and younger generations, experience contributes more to wages than education. The occupation of workers is important for wage determination. All workers in the included occupational groups are paid more than workers engaged in agricultural activities. Workers employed as technicians or administrators obtain the highest returns. The white/nonwhite wage disparity reveals that white workers are paid 17 percent more than their nonwhite co-workers, taking into account other characteristics. Gender disparities are large in the Northeast and heterogeneous across the wage distribution. The time spent in the current state impacts adversely on wages. That is, those that have stayed earn, on average, less than the newcomers. There are no considerable differences between male and female workers. Union membership has a positive impact on workers ' wages.
    Keywords: Health Monitoring & Evaluation,Curriculum & Instruction,Teaching and Learning,Gender and Education,Economic Theory & Research
    Date: 2005–03–01
  6. By: Esther Duflo; Rema Hanna
    Abstract: In the rural areas of developing countries, teacher absence is a widespread problem. This paper tests whether a simple incentive program based on teacher presence can reduce teacher absence, and whether it has the potential to lead to more teaching activities and better learning. In 60 informal one-teacher schools in rural India, randomly chosen out of 120 (the treatment schools), a financial incentive program was initiated to reduce absenteeism. Teachers were given a camera with a tamper-proof date and time function, along with instructions to have one of the children photograph the teacher and other students at the beginning and end of the school day. The time and date stamps on the photographs were used to track teacher attendance. A teacher's salary was a direct function of his attendance. The remaining 60 schools served as comparison schools. The introduction of the program resulted in an immediate decline in teacher absence. The absence rate (measured using unannounced visits both in treatment and comparison schools) changed from an average of 42 percent in the comparison schools to 22 percent in the treatment schools. When the schools were open, teachers were as likely to be teaching in both types of schools, and the number of students present was roughly the same. The program positively affected child achievement levels: a year after the start of the program, test scores in program schools were 0.17 standard deviations higher than in the comparison schools and children were 40 percent more likely to be admitted into regular schools.
    JEL: I20 I21 J13 J30
    Date: 2005–12
  7. By: Pradeep Dubey; John Geanakoplos (Cowles Foundation, Yale University)
    Abstract: We introduce grading into games of status. Each player chooses effort, producing a stochastic output or score. Utilities depend on the ranking of all the scores. By clustering scores into grades, the ranking is coarsened, and the incentives to work are changed. We first apply games of status to grading exams. Our main conclusion is that if students care primarily about their status (relative rank) in class, they are often best motivated to work not by revealing their exact numerical exam scores (100,99,...,1), but instead by clumping them into coarse categories (A,B,C). When student abilities are disparate, the optimal grading scheme is always coarse. Furthermore, it awards fewer A's than there are alpha-quality students, creating small elites. When students are homogeneous, we characterize optimal grading schemes in terms of the stochastic dominance between student performances (when they shirk or work) on subintervals of scores, showing again why coarse grading may be advantageous. In both the disparate case and the homogeneous case, we prove that absolute grading is better than grading on a curve, provided student scores are independent. We next bring games of money and status to bear on the optimal wage schedule: workers can be motivated not merely by the purchasing power of wages, but also by the status higher wages confer. How should the employer combine both incentive devices to generate an optimal pay schedule? When workers' abilities are disparate, the optimal wage schedule creates different grades than we found with status incentives alone. The very top type should be motivated solely by money, with enormous salaries going to a tiny elite. Furthermore, if the population of workers diminishes as we go up the ability ladder and their disutility for work does not fall as fast, then the optimal wage schedule exhibits increasing wage differentials, despite the linearity in production. When workers are homogeneous, the same status grades are optimal as we found with status incentives alone. A bonus is paid only to scores in the top status grade.
    Keywords: Status, Grading, Incentives, Education, Exams, Wages
    JEL: C70 I20 I30
    Date: 2005–12
  8. By: Rubio, Marcela; Tinajero, Monica; López-Acevedo, Gladys
    Abstract: The authors follow the Hellerstein, Neumark, and Troske (1999) framework to estimate marginal productivity differentials and compare them with estimated relative wages. The analysis provides evidence on productivity and nonproductivity-based determinations of wages. Special emphasis is given to the effects of human capital variables, such as education, experience, and training on wages and productivity differentials. Higher education yields high er productivity. However, highly educated workers earn less than their productivity differentials would predict. On average, highly educated workers are unable to fully appropriate their productivity gains of education through wages. On the other hand, workers with more experience are more productive in the same proportion that they earn more in medium and large firms, meaning they are fully compensated for their higher productivity. Finally, workers in micro and small firms are paid more than what their productivity would merit. Training benefits firms and employees since it significantly increases workers ' productivity and their earnings.
    Keywords: Primary Education,Economic Theory & Research,Access & Equity in Basic Education,Labor Markets,Tertiary Education
    Date: 2005–12–01
  9. By: Filmer, Deon
    Abstract: This paper analyzes the relationship between whether a young person has a disability, the poverty status of their household, and their school participation using 11 household surveys from nine developing countries. Between 1 and 2 percent of the population is identified as having a disability. Youth with disabilities sometimes live in poorer households, but the extent of this concentration is typically neither large nor statistically signif icant. However, youth with disabilities are almost always substantially less likely to start school, and in some countries have lower transition rates resulting in lower schooling attainment. The order of magnitude of the school participation disability deficit is often larger than those associated with other characteristics such as gender, rural residence, or economic status differentials.
    Keywords: Social Cohesion,Social Protections & Assistance,Gender and Law,Primary Education,Health Monitoring & Evaluation
    Date: 2005–12–01
  10. By: Ron A. Boschma; Markku Sotarauta
    Abstract: In the last decade, the Finnish economy has shown an unprecedented recovery, after being hit by a deep crisis in the early 1990s. The paper views and interprets this successful transformation process based on ICT from an evolutionary perspective. Although the rapid pace of the restructuring of the Finnish economy suggests a break with the past, this remarkable recovery was firmly rooted in its economic history. In addition, Finnish public policy played its role in turning Finland into a knowledge economy. Although a master plan for the Finnish economy was lacking, many policies worked out quite well together over an extended period. Building on education, research and technology policy initiatives taken in the 1970s and 1980s, the deep economic crisis in the early 1990s paved the way for new policy directions, with a focus on network-facilitating innovation policies.
    Keywords: evolutionary economics, economic geography, innovation policy, Finnish economy, Finnish policy, ICT cluster
    Date: 2005–08
  11. By: Eric French; Bhashkar Mazumder; Christopher Taber
    Abstract: We examine the key components that determine an individual's early career wage growth and how these factors have changed for less skilled workers over the last twenty years. In particular, we examine the relative importance of accumulating work experience as compared to the quality of job matches in influencing wage growth. Our main finding is that over this period, the vast majority of the variation in wage growth is due to variability in the return to experience.
    Date: 2005

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