nep-edu New Economics Papers
on Education
Issue of 2006‒10‒28
twenty-one papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. Estimation of Class-Size Effects, Using 'Maimonides' Rule': The Case of French Junior High Schools By Gary-Bobo, Robert J.; Mahjoub, Mohamed Badrane
  2. To Segregate or to Integrate: Education Politics and Democracy By de la Croix, David; Doepke, Matthias
  3. The Earnings Effect of Education at Community Colleges By Dave E. Marcotte
  4. Does School Tracking Affect Equality of Opportunity? New International Evidence By Giorgio Brunello; Daniele Checchi
  5. Risk Aversion and Human Capital Investment: A structural Econometric Model By Brodaty, Thomas; Gary-Bobo, Robert J.; Prieto, Ana
  6. Participation and Schooling in a Public System of Higher Education By Kelchtermans, Stijn; Verboven, Frank
  7. Close Neighbours Matter: Neighbourhood Effects on Early Performance at School By Goux, Dominique; Maurin, Eric
  8. Is there a Causal Effect of High School Math on Labor Market Outcomes? By Juanna Schrøter Joensen; Helena Skyt Nielsen
  9. Peer Effects in European Primary Schools: Evidence from PIRLS By Ammermüller, Andreas; Pischke, Jörn-Steffen
  10. Education and Labor-Market Discrimination By Kevin Lang; Michael Manove
  11. The Dynamics of the Racial Test Score Gap During the School Years in Britain By Patacchini, Eleonora; Zenou, Yves
  12. Over-Education in Multilingual Economies: Evidence from Catalonia By Maite Blazquez; Silvio Rendon
  14. Child Education and Work Choices in the Presence of a Conditional Cash Transfer Programme in Rural Colombia By Attanasio, Orazio; Fitzsimons, Emla; Gomez, Ana; Lopez, Diana; Meghir, Costas; Mesnard, Alice
  15. Impact of Early Childhood Care and Education on Children's Preschool Cognitive Development: Canadian Results from a Large Quasi-experiment By Pierre Lefebvre; Philip Merrigan; Matthieu Verstraete
  16. Differences in Wage Growth by Education Level: Do Less-Educated Workers Gain Less from Work Experience? By Helen Connolly; Peter Gottschalk
  17. How Large an Effect Can We Expect from School Reforms? By Spyros Konstantopoulos; Larry Hedges
  18. Social Interactions and Schooling Decisions By Cattaneo, Alejandra; Lalive, Rafael
  19. Overcoming the natural resource constraint through dedicated R&D effort with heterogenous labor supply By Jean-Pierre Amigues; Michel Moreaux; Francesco Ricci
  20. Are Elite Universities Losing their Competitive Edge? By Han Kim, E; Morse, Adair; Zingales, Luigi
  21. Racial Segregation and Public School Expenditure By La Ferrara, Eliana; Mele, Angelo

  1. By: Gary-Bobo, Robert J.; Mahjoub, Mohamed Badrane
    Abstract: Using a rich sample of students from French junior high schools with a panel structure, we obtain small but significant and negative effects of class size on probabilities of educational success, in grades 6 and 7. An 8 to 10 student reduction of class size puts the child of a non-educated mother on an equal footing with the child of a college-educated mother. These effects vanish in grades 8 and 9. We use Angrist and Lavy's (1999) theoretical class size (i.e., "Maimonides' rule") as an instrument for observed class size. This is possible, due to availability of total high school and total grade enrollment in each year, in our exceptional data set. We control for father occupation, mother education and other variables. Using a Probit framework to model transitions from one grade to another (and thus grade repetitions), we simultaneously estimate the student's probabilities of success over 4 years in junior high school. This is done while allowing a general covariance structure of the error terms that affect latent student-performance variables and class-size auxiliary equations.
    Keywords: class size; econometrics; education; instrumental variables; junior high school
    JEL: C33 C35 I20
    Date: 2006–07
  2. By: de la Croix, David; Doepke, Matthias
    Abstract: The governments of nearly all countries are major providers of primary and secondary education to its citizens. In some countries, however, public schools coexist with private schools, while in others the government is the sole provider of education. In this study, we ask why different societies make different choices regarding the mix of private and public schooling. We develop a theory which integrates private education and fertility decisions with voting on public schooling expenditures. In a given political environment, high income inequality leads to more private education, as rich people opt out of the public system. Comparing across political systems, we find that concentration of political power can lead to multiple equilibria in the determination of public education spending.
    Keywords: democracy; private education; probabilistic voting; public education
    JEL: D72 H42 I21 O10
    Date: 2006–08
  3. By: Dave E. Marcotte (University of Maryland Baltimore County and IZA Bonn)
    Abstract: In this paper, I make use of data from the 2000 follow-up of the National Education Longitudinal Survey (NELS) post-secondary education transcript files to extend what is known about the value of education at community colleges. I examine the effects of enrollment in community colleges on students’ subsequent earnings. I estimate the effects of credits earned separate from credentials because community colleges are often used as a means for students to engage in study not necessarily leading to a degree or certificate. I find consistent evidence of wage and salary effects of both credits and degrees, especially for women. There is no substantial evidence that enrollment in vocational rather than academic coursework has a particularly beneficial effect, however.
    Keywords: community college, training, earnings, human capital
    JEL: I2 J24 J31
    Date: 2006–09
  4. By: Giorgio Brunello (University of Padova, Collegio Carlo lberto Torino, CESifo and IZA Bonn); Daniele Checchi (University of Milano and IZA Bonn)
    Abstract: This paper investigates whether at the interaction between family background and school tracking affects human capital accumulation. Our a priori view is that more tracking should reinforce the role of parental privilege, and thereby reduce equality of opportunity. Compared to the current literature, which focuses on early outcomes, such as test scores at 13 and 15, we look at later outcomes, including literacy, dropout rates, college enrolment, employability and earnings. While we do not confirm previous results that tracking reinforces family background effects on literacy, we do confirm our view when looking at educational attainment and labour market outcomes. When looking at early wages, we find that parental background effects are stronger when tracking starts earlier. We reconcile the apparently contrasting results on literacy, educational attainment and earnings by arguing that the signalling role of formal education – captured by attainment – matters more than actual skills – measured by literacy – in the early stages of labour market experience.
    Keywords: education, tracking, literacy, wages
    JEL: J24
    Date: 2006–09
  5. By: Brodaty, Thomas; Gary-Bobo, Robert J.; Prieto, Ana
    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.
    Keywords: econometrics; human capital; returns to education; risk aversion
    JEL: I2 J24 J31
    Date: 2006–06
  6. By: Kelchtermans, Stijn; Verboven, Frank
    Abstract: We analyze the determinants of participation (whether to study) and schooling (where and what to study) in a public system of higher education, based on a unique dataset of all eligible high school pupils in an essentially closed region (Flanders). We find that pupils perceive the available institutions and programs as close substitutes, implying an ambiguous role for travel costs: they hardly affect the participation decisions, but have a strong impact on the schooling decisions. In addition, high school background plays an important role in both the participation and schooling decisions. To illustrate how our empirical results can inform the debate on reforming public systems, we assess the effects of tuition fee increases. Uniform cost-based tuition fee increases achieve most of the welfare gains; the additional gains from fee differentiation are relatively unimportant. These welfare gains are quite large if one makes conservative assumptions on the social cost of public funds, and there is a substantial redistribution from students to outsiders.
    Keywords: higher education; participation; policy reform; schooling
    JEL: I2 I23
    Date: 2006–05
  7. By: Goux, Dominique; Maurin, Eric
    Abstract: Children's outcomes are strongly correlated with those of their neighbours. The extent to which this is causal is the subject of an extensive literature. An identification problem exists because people with similar characteristics are observed to live in close proximity. Another major difficulty is that neighbourhoods measured in available data are often considerably larger than those which matter for outcomes (i.e. close neighbours). Several institutional features of France enable us to address these problems. We find that an adolescent's performance at the end of junior high-school are strongly influenced by the performance of other adolescents in the neighbourhood.
    Keywords: neighbourhood effects on education
    JEL: I21 J24
    Date: 2006–05
  8. By: Juanna Schrøter Joensen (University of Aarhus); Helena Skyt Nielsen (University of Aarhus and IZA Bonn)
    Abstract: Outsourcing of jobs to low-wage countries has increased the focus on the accumulation of skills – such as Math skills – in high-wage countries. In this paper, we exploit a high school pilot scheme to identify the causal effect of advanced high school Math on labor market outcomes. The pilot scheme reduced the costs of choosing advanced Math because it allowed for at more flexible combination of Math with other courses. We find clear evidence of a causal relationship between Math and earnings for the students who are induced to choose Math after being exposed to the pilot scheme. The effect partly stems from the fact that these students end up with higher education.
    Keywords: Math, high school curriculum, instrumental variable, local average treatment effect
    JEL: I20 J24
    Date: 2006–10
  9. By: Ammermüller, Andreas; Pischke, Jörn-Steffen
    Abstract: We estimate peer effects for fourth graders in six European countries. The identification relies on variation across classes within schools. We argue that classes within primary schools are formed roughly randomly with respect to family background. Similar to previous studies, we find sizeable estimates of peer effects in standard OLS specifications. The size of the estimate is much reduced within schools. This could be explained either by selection into schools or by measurement error in the peer background variable. When we correct for measurement error we find within school estimates close to the original OLS estimates. Our results suggest that the peer effect is modestly large, measurement error is important in our survey data, and selection plays little role in biasing peer effects estimates. We find no significant evidence of non-linear peer effects.
    Keywords: measurement error; peer effects
    JEL: I21 J24
    Date: 2006–05
  10. By: Kevin Lang (Department of Economics, Boston University); Michael Manove (Department of Economics, Boston University)
    Abstract: We propose a model that combines statistical discrimination and educational sorting that explains why blacks get more education than do whites of similar cognitive ability. Our model explains the di¤erence between blacks and whites in the relations between education and AFQT and between wages and education. It cannot easily explain why, conditional only on AFQT, blacks earn no more than do whites. It does, however, suggest, that when comparing the earnings of blacks and whites, one should control for both AFQT and education in which case a substantial black-white wage di¤erential reemerges. We explore and reject the hypothesis that di¤erences in school quality between blacks and whites explain the wage and education di¤erentials. Our ?ndings support the view that some of the black-white wage di¤erential re?ects the operation of the labor market.
    Date: 2006–02
  11. By: Patacchini, Eleonora; Zenou, Yves
    Abstract: We investigate the racial gap in test scores between white and non-white students in Britain both in levels and differences across the school years. We find that there is a substantial racial gap in test scores, especially between ages 7 and 11, and a less severe one between ages 11 and 16. It thus seems that nonwhites are losing ground at school, especially during the first five years. We then investigate the reasons behind this racial gap and its evolution. We focus on racial differences in parents' involvement in education. We find that a non-negligible part of the test score racial gap can be explained by these cultural differences. In particular, we show that if non-white parents would invest in education of their 11 year-old children as much as white parents do, then the racial test score gap in reading and mathematics would be reduced by 18.1 and 7.2 percent, respectively.
    Keywords: cultural differences; education; ethnic minorities; parental involvement
    JEL: I21 J15 J24
    Date: 2006–05
  12. By: Maite Blazquez (Universidad Autonoma de Madrid); Silvio Rendon (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM))
    Abstract: Individuals with deficient language skills may compensate for this disadvantage in the labor market by acquiring more formal skills. Catalonia's economy is characterized by linguistic diversity and provides thereby a unique opportunity to measure the incidence of language proficiency on over-education. Catalan language, formerly confined to informal uses, became co-official with Spanish and the language of instruction in the early eighties. This change, however, did not undermine the intensive use of Castilian in most spheres of communication. Descriptive evidence seems to suggest that individuals with better language knowledge are more likely to be over-educated. This can lead us to think, as is usually the case in the public discussions, that individuals who are not fluent in the language of instruction tend to under-educate, since they are discouraged to attend school. However, once we estimate a model that controls for individuals' socio-demographic characteristics, the opposite emerges: language knowledge is shown to have in fact a negative effect on over-education. This effect, although robust to accounting for endogeneity of language knowledge and significant at the individual level, is mostly non-significant on average.
    Keywords: Over-Education, Language, Immigration, Skill Premium.
    JEL: J61 J70 J31 I20
    Date: 2006–10
  13. By: Gonzalo Olcina Vauteren (Universitat de València); Luisa Escriche (Universitat de València)
    Abstract: The aim of this paper is to explain how financial constraints and family background characteristics affect the signalling educational investments of individuals born in low-income families. We show that talented students who are poor are unable to signal their talent, as the maximum level of education they can attain may also be achieved by less talented students who are rich. Under this approach, a de-crease in inequalities across generations cannot be expected. The paper also shows that an increase in educational standards would help poor individuals with high-ability if it is combined with other non-monetary measures.
    Keywords: Market selection hypothesis, General Equilibrium with Incomplete markets, Wealth accumulation
    JEL: I20 C70
    Date: 2006–10
  14. By: Attanasio, Orazio; Fitzsimons, Emla; Gomez, Ana; Lopez, Diana; Meghir, Costas; Mesnard, Alice
    Abstract: The paper studies the effects of Familias en Acción, a conditional cash transfer programme implemented in rural areas in Colombia in 2002, on school enrolment and child labour. Using a quasi-experimental approach, our methodology makes use of an interesting feature of the data, which allows us to identify anticipation effects. Our results show that the programme increased school participation of 14 to 17 year old children quite substantially, by between 5 and 7 percentage points, and had lower, but non-negligible effects on enrolment of younger children of between around 1.5 and 2.5 percentage points. In terms of work, the effects are generally largest for younger children whose participation in domestic work decreased by around 10 to 12 percentage points after the programme but whose participation in income-generating work remained largely unaffected by the programme. We also find evidence of school and work time not being fully substitutable, suggesting that some, but not all, of the increased time at school may be drawn from children’s leisure time.
    Keywords: child labour; conditional cash transfers; education
    JEL: I28 I38 J22 O15
    Date: 2006–08
  15. By: Pierre Lefebvre; Philip Merrigan; Matthieu Verstraete
    Abstract: On September 1st 1997, a new early childhood care and education policy was initiated by the provincial government of Québec, the second most populous province in Canada. Providers of childcare services licensed by the Department of the Family began offering daycare spaces at the reduced parental contribution of $5 per day per child for children aged 4. In successive years, the government reduced the age requirement and engaged in a plan to create new childcare facilities and pay for the cost of additional $5 per day childcare spaces. By September 2000, the low-fee policy applied to all children aged 0 to 59 months and the number of partly subsidized spaces increased from 77,000 in 1998 to 170,000 spaces, totally subsidized, by midyear 2003. In addition, on September 1st 1997, all public schools offered full-day rather than part-day kindergarten for 5-year-old children. No such important policy changes for preschool (including kindergarten) children were enacted in the other Canadian provinces over the years 1994 to 2003. Using biennial data drawn from Statistics Canada’s National Longitudinal Survey of Children and Youth (NLSCY), conducted since 1994-1995, this study attempts to estimate the effect of the policy on Québec’s preschool children cognitive test scores. A non-experimental evaluation framework based on multiple pre- and post-treatment periods is used to estimate the effect of the early childhood care and education regime on school readiness. The econometric results support the hypothesis that the policy had no effects on the cognitive development of 4-year-olds (the PPVT-R raw scores and the PPVT-R standardized scores). However, we provide evidence that the policy had a substantial negative impact on the scores of 5-year-olds.
    Keywords: preschool children, school readiness, childcare, kindergarten, treatment effects, natural experiment
    JEL: H42 J21 J22
    Date: 2006
  16. By: Helen Connolly (Northeastern University); Peter Gottschalk (Boston College and IZA Bonn)
    Abstract: This paper revisits the old question of whether wage growth differs by education level. Do more educated workers invest more than less educated workers in firm specific, sector specific or general human capital? Do they gain more from improved job match? The paper makes both a methodological and a substantive contribution by offering an alternative strategy for separately identifying returns to general experience, sector specific experience, firm tenure, and job match. Our empirical results, based on the Survey of Income and Program Participation, show that overall wage growth is higher for more-educated workers. This reflects higher returns to general experience for college graduates and higher returns to sector experience for high school graduates. Improvements in job match grow monotonically with education.
    Keywords: low wage workers, returns to tenure, sector experience, general experience, job match
    JEL: J30
    Date: 2006–09
  17. By: Spyros Konstantopoulos (Northwestern University and IZA Bonn); Larry Hedges (Northwestern University)
    Abstract: Judging the success of school reform requires an interpretative context in which to judge whether effects obtained are large enough to be important or so small as to be a disappointment. The logic of school reform suggests two frameworks with which to judge the importance of effects. One is the size of the existing achievement gaps between important groups in society. The other is the size of gaps in mean achievement among schools (adjusted for student characteristics). NAEP data is used to demonstrate that in national data, gaps which appear large by one standard may appear small by the other. We argue that the most appropriate framework for judging reform effects is the national distribution of school effects.
    Keywords: academic achievement, school effects, multi-level models
    JEL: I20
    Date: 2006–10
  18. By: Cattaneo, Alejandra; Lalive, Rafael
    Abstract: The aim of this paper is to study whether schooling choices are affected by social interactions. Such social interactions may be important because children enjoy spending time with other children or parents learn from other parents about the ability of their children. Identification is based on a randomized intervention that grants a cash subsidy encouraging school attendance among a sub-group of eligible children within small rural villages in Mexico. Results indicate that (i) the eligible children tend to attend school more frequently, (ii) but also the neligible children acquire more schooling when the subsidy is introduced in their local village, (iii) social interactions are economically important, and (iv) they may arise due to changes in parents’ perception of their children’s ability.
    Keywords: field experiment; peer effects; PROGRESA; schooling
    JEL: C93 I21 I28
    Date: 2006–09
  19. By: Jean-Pierre Amigues (Université de Toulouse 1 and INRA (IDEI and LERNA)); Michel Moreaux (Université de Toulouse 1 (IUF, IDEI and LERNA)); Francesco Ricci (Université de Cergy-Pontoise (THEMA) and LERNA)
    Abstract: The effective labor possibility frontier (ELPF) is defined as the set of statically efficient allocations of labor imputs in the competing tasks of production and R&D. It summaries the labor scarcity constraint. We show that the dynamically efficient paths of R&D, resource extraction and consumption depend on the shape of the ELPF, while their steady state levels do not. In the case of an initial low endowment of resources, the transition to the stationary state is characterized by lower R&D effort, slower growth of per-capita consumption and a longer transition when labor is relatively specialized than when it is more flexible. We analyse policy options for modifying the shape of the ELPF, such as increasing the size of the labor force, subsiding higher education or lifelong learning.
    Keywords: Exhaustible resources and R&D, Labor allocation, Education policy
    JEL: Q01 Q30 I20 J00
    Date: 2006
  20. By: Han Kim, E; Morse, Adair; Zingales, Luigi
    Abstract: We study the location-specific component in research productivity of economics and finance faculty who have ever been affiliated with the top 25 universities in the last three decades. We find that there was a positive effect of being affiliated with an elite university in the 1970s; this effect weakened in the 1980s and disappeared in the 1990s. We decompose this university fixed effect and find that its decline is due to the reduced importance of physical access to productive research colleagues. We also find that salaries increased the most where the estimated externality dropped the most, consistent with the hypothesis that the de-localization of this externality makes it more difficult for universities to appropriate any rent. Our results shed some light on the potential effects of the internet revolution on knowledge-based industries.
    Keywords: faculty productivity; firm boundaries; knowledge-based industries; theory of the firm
    JEL: D85 I23 J24 J31 J62 L23 L31 O33
    Date: 2006–05
  21. By: La Ferrara, Eliana; Mele, Angelo
    Abstract: This paper explores the effect of racial segregation on public school expenditure in US metropolitan areas and school districts. Our starting point is the literature that relates public good provision to the degree of racial fragmentation in the community. We argue that looking at fragmentation alone may be misleading and that the geographic distribution of different racial groups needs to be taken into account. Greater segregation is associated with more homogeneity in some subareas and more heterogeneity in others, and this matters if decisions on spending are taken at aggregation levels lower than the MSA. For given fragmentation, the extent of segregation conveys information on households’ possibility to sort into relatively more or less homogeneous jurisdictions. We account for the potential endogeneity of racial segregation and find that the latter has a positive impact on average public school expenditure both at the MSA and at the district level. At the same time, increased segregation leads to more inequality in spending across districts of the same MSA, thus worsening the relative position of poorer districts.
    Keywords: public school expenditure; racial fragmentation; segregation
    JEL: H41 H73 J15
    Date: 2006–07

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