nep-edu New Economics Papers
on Education
Issue of 2006‒05‒20
nine papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  2. L'éducation dans la révolution. Le système éducatif cubain depuis la crise des années 1990. By Philippe Bayart; Rémy Herrera; Eric Mulot
  3. Intergenerational Mobility and Assortative Mating. Effects of an Educational Reform By Holmlund, Helena
  4. Risk Aversion and Human Capital Investment: a Structural Econometric Model By Thomas Brodaty; Robert Gary-Bobo; Ana Prieto
  5. Can Risk Aversion Explain Schooling Attainments? Evidence from Italy By Christian Belzil; Marco Leonardi
  6. Dual Poverty Trap By Ryo Horii; Masaru Sasaki
  7. Is Human Capital a Significant Determinant of Portugal’s FDI Attractiveness? By Ana Teresa Tavares; Aurora A.C. Teixeira
  8. Schooling, learning on-the-job, earnings and inequality By Luis P. Correia
  9. All in the Extended Family: Grandparents, Aunts, and Uncles and Educational Attainment By Linda Loury

  1. By: Jean-Paul Faguet; Fabio Sanchez
    Abstract: The effects of decentralization on public sector outputs is much debated but little agreed upon. This paper compares the remarkable case of Bolivia with the more complex case of Colombia to explore decentralization's effects on public education outcomes. In Colombia, decentralization of education finance improved enrollment rates in public schools. In Bolivia, decentralization made government more responsive by re-directing public investment to areas of greatest need. In both countries, investment shifted from infrastructure to primary social services. In both, it was the behavior of smaller, poorer, more rural municipalities that drove these changes.
    Keywords: decentralization, education, public investment, Bolivia, Colombia, local government
    Date: 2006–03
  2. By: Philippe Bayart (Centre d'Economie de la Sorbonne); Rémy Herrera (Centre d'Economie de la Sorbonne); Eric Mulot (Centre d'Economie de la Sorbonne)
    Abstract: Education constitutes one of the fundamental axes of the Cuban socialist development project and one of the means of achieving the goal of equality. In that country, the educational system has the purpose to call into question the capitalist division of labour, as well as the social division resulting from it. The principles which direct the educational policies in Cuba are universalism, exemption from payment and the public character of education. Their application has made it possible to build in the island one of the best educational systems in the world in terms of access and quality. To what extend the dramatic crisis following the dissolution of USSR put at evil the educational sector in Cuba ? In Latin America, the educational services were severely affected by the recent capitalist crises. Nevertheless, Cuba knew to preserve the pillars of its educational system. However, the huge changes occuring in Cuba since the 1990's involved educational transformations, to be explained.
    Keywords: Education, development, social spending, training, employment, equality.
    JEL: H52 I21 I28 J24 J68
    Date: 2006–04
  3. By: Holmlund, Helena (Swedish Institute for Social Research, Stockholm University)
    Abstract: This paper provides new evidence on the role of the educational system for intergenerational mobility. I evaluate an educational reform, implemented in Sweden in the 1950s, which postponed ability tracking and extended compulsory education from seven to nine years. The reform may have influenced intergenerational mobility by several different mechanisms. First, there is the possibility of a direct effect of extending compulsory education. Second, the age at which ability tracking takes place can be crucial for the educational choice. In particular, the earlier the tracking, the more likely it is that the schooling decision is made by the parents. Third, recognizing that economic well-being is determined by the income of the household, assortative mating plays a major role in the mobility process. I argue that the peer group in which couples form can be affected by the educational system, and evaluate how the reform affects intergenerational mobility through changes in assortative mating. Differences-indifferences estimates and sibling-difference estimates indicate that the reform indeed resulted in a sizeable increase in intergenerational income mobility, and in a lower educational association between children and parents. The reform also contributed to reducing the association in education between an individual’s partner and parents, which I interpret as an effect operating through reform effects on mating patterns.
    Keywords: -
    Date: 2006–05–10
  4. By: Thomas Brodaty (THEMA, Université de Cergy-Pontoise); Robert Gary-Bobo (Université de Paris 1, IDEP and CEPR); Ana Prieto (THEMA, Université de Cergy-Pontoise)
    Abstract: We propose to model individual educational investments as a rational decision, maximizing expected utility, conditional on some characteristics observed by the student, under the combined risks affecting future wages and schooling duration. Assuming that students' attitudes toward risk can be represented by a CRRA utility, we show that the risk-aversion parameter can be identified in a natural way, using the variation in school-leaving ages, conditional on certified educational levels. Estimation can be performed by means of classic Maximum Likelihood methods. The model can easily be compared with a non-structural, simplified version, which is a standard wage equation with endogenous dummy variables representing education levels, education levels being themselves determined by an Ordered Probit model. We find small but significant values of the coefficient of relative risk aversion, between 0:1 and 0:9. These results are obtained with a rich sample of 12,500 young men who left the educational system in 1992, in France.
    Date: 2006–03–15
  5. By: Christian Belzil (CNRS-GATE, CIRANO and IZA Bonn); Marco Leonardi (University of Milan and IZA Bonn)
    Abstract: Using unique Italian panel data, in which individual differences in behavior toward risk are measured from answers to a lottery question, we investigate if (and to what extent) risk aversion can explain differences in schooling attainments. We formulate the schooling decision process as a reduced-form dynamic discrete choice. The model is estimated with a degree of flexibility virtually compatible with semi-parametric likelihood techniques. We analyze how grade transition from one level to the next varies with preference heterogeneity (risk aversion), parental human capital, socioeconomic variables and persistent unobserved (to the econometrician) heterogeneity. We present evidence that schooling continuation probabilities decrease with risk aversion at low grade levels, but increase with risk aversion at the time when the decision to enter higher education is made. However, differences in attitudes toward risk account for a modest portion of the probability of entering higher education. Differences in parental human capital and ability(ies) are much more important.
    Keywords: risk aversion, education, human capital, dynamic discrete choices
    JEL: J24
    Date: 2006–05
  6. By: Ryo Horii (Graduate School of Economics, Osaka University); Masaru Sasaki (Graduate School of Economics, Osaka University)
    Abstract: This paper constructs an overlapping generations model of search equilibrium that analyzes intergenerational and coordination traps simultaneously. When parents are uneducated, their children often face difficulty in finishing school, and therefore likely to remain uneducated. In addition, if children expect that other children of the same generation do not receive education, they anticipate that firms will not create enough jobs for educated and thus are discouraged from schooling. These two mechanisms of poverty trap reinforce each other-creating a dual poverty trap. Escaping from the trap requires a combined, not separate, implementation of financial assistance for schooling and policies for changing agentsf expectation.
    Keywords: overlapping generations model, education, intergenerational externality, job search.
    JEL: O11 J62 J23
    Date: 2006–05
  7. By: Ana Teresa Tavares (CEMPRE, Faculdade de Economia, Universidade do Porto); Aurora A.C. Teixeira (CEMPRE, Faculdade de Economia, Universidade do Porto)
    Abstract: The paper tests whether human capital is a relevant foreign direct investment (FDI) determinant. Drawing on a large-scale survey of firms located in Portugal, and controlling for firms’ structural (i.e. size, age and industry), strategic (R&D and export intensities) and linkages (density of university contacts) variables, our key finding is that, indeed, human capital exerts a positive and significant influence on FDI attraction. Relevant policy implications emerge from the results of this study, at two main levels: (i) policies intended to stimulate human capital formation; and (ii) as regards FDI-focused policies. These policies are discussed in the light of the Portuguese case.
    Keywords: Foreign direct investment (FDI), multinational enterprises (MNEs), human capital, education, skills, R&D-performing firms.
    JEL: J24 F23
    Date: 2006–05
  8. By: Luis P. Correia
    Abstract: Why might people in poor countries leave school earlier and invest less in learning on-thejob than people in rich ones? How do these human capital decisions impact on inequality? To give quantitative answers to these questions, I build an overlapping generations model with optimal human capital accumulation and a given distribution of abilities. Variation in mortality and population growth rates can generate large variability in schooling decisions, earnings profiles and measures of inequality. High mortality and population growth rates are shown to produce comparatively little investment in human capital, flat earnings profiles and low inequality, both within and across cohorts.
    Keywords: human capital, earnings profiles, schooling, inequality.
    JEL: I20 J11 J24 O11 O40
    Date: 2006–05
  9. By: Linda Loury
    Abstract: Previous work on social interactions has analyzed the effects of nuclear family, peer, school, and neighborhood characteristics. This paper complements this research by first showing that individuals from similar nuclear families often differ in extended family member characteristics. It then demonstrates that older extended family members - aunts, uncles, and grandparents – independently affect college attendance probabilities and test score results of their younger relatives. In some cases, the sizes of the estimated effects are large enough to substantially narrow the achievement gap between disadvantaged and other youth.
    Date: 2006

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