nep-edu New Economics Papers
on Education
Issue of 2006‒11‒18
fifteen papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. A dime a day : the possibilities and limits of private schooling in Pakistan By Andrabi, Tahir; Das, Jishnu; Khwaja, Asim Ijaz
  2. Learning levels and gaps in Pakistan By Das, Jishnu; Pandey, Priyanka; Zajonc, Tristan
  3. Quality-Consistent Estimates of International Returns to Skill By Eric A. Hanushek; Lei Zhang
  4. The Growing Allocative Inefficiency of the U.S. Higher Education Sector By James D. Adams; J. Roger Clemmons
  5. Are Public Subsidies to Higher Education Regressive ? By William R. Johnson
  6. To Segregate or to Integrate: Education Politics and Democracy By Matthias Doepke
  7. Taxing Human Capital Efficiently: The Double Dividend of Taxing Non-qualified Labour more Heavily than Qualified Labour By Wolfram F. Richter
  8. School Quality and the Black-White Achievement Gap By Eric A. Hanushek; Steven G. Rivkin
  9. The Effects of Education Quality on Income Growth and Mortality Decline By Eliot A. Jamison; Dean T. Jamison; Eric A. Hanushek
  10. Funding Higher Education and Wage Uncertainty : Income Contingent Loan versus Mortgage Loan By Migali, Giuseppe
  11. Parental Transfers, Student Achievement, and the Labor Supply of College Students By Kalenkoski, Charlene Marie; Sabrina Wulff Pabilonia
  12. Constrained School Choice By Guillaume Haeringer; Flip Klijn
  13. All in the Extended Family: Grandparents, Aunts, and Uncles and Educational Attainment By Linda Loury
  14. Making sense of change in university governance By Åse Gornitzka & Johan P. Olsen
  15. Unequal Opportunities and Human Capital Formation By Daniel Mejía; Marc St-Pierre

  1. By: Andrabi, Tahir; Das, Jishnu; Khwaja, Asim Ijaz
    Abstract: This paper looks at the private schooling sector in Pakistan, a country that is seriously behind schedule in achieving the Millennium Development Goals. Using new data, the authors document the phenomenal rise of the private sector in Pakistan and show that an increasing segment of children enrolled in private schools are from rural areas and from middle-class and poorer families. The key element in their rise is their low fees-the average fee of a rural private school in Pakistan is less than a dime a day (Rs.6). They hire predominantly local, female, and moderately educated teachers who have limited alternative opportunities outside the village. Hiring these teachers at low cost allows the savings to be passed on to parents through low fees. This mechanism-the need to hire teachers with a certain demographic profile so that salary costs are minimized-defines the possibility of private schools: where they arise, fees are low. It also defines their limits. Private schools are horizontally constrained in that they arise in villages where there is a pool of secondary educated women. They are also vertically constrained in that they are unlikely to cater to the secondary levels in rural areas, at least until there is an increase in the supply of potential teachers with the required skills and educational levels.
    Keywords: Primary Education,Education For All,Tertiary Education,Secondary Education,Teaching and Learning
    Date: 2006–11–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:4066&r=edu
  2. By: Das, Jishnu; Pandey, Priyanka; Zajonc, Tristan
    Abstract: The authors report on a survey of primary public and private schools in rural Pakistan with a focus on student achievement as measured through test scores. Absolute learning is low compared with curricular standards and international norms. Tested at the end of the third grade, a bare majority had mastered the K-I mathematics curriculum and 31 percent could correctly form a sentence with the word " school " in the vernacular (Urdu). As in high-income countries, bivariate comparisons show that higher learning is associated with household wealth and parental literacy. In sharp contrast to high-income countries, these gaps decrease dramatically in a multivariate regression once differences between children in the same school are looked at. Consequently, the largest gaps are between schools. The gap in English test scores between government and private schools, for instance, is 12 times the gap between children from rich and poor families. To contextualize these results within a broader South Asian context, the authors use data from public schools in the state of Uttar Pradesh in India. Levels of learning and the structure of the educational gaps are similar in the two samples. As in Pakistan, absolute learning is low and the largest gaps are between schools: the gap between good and bad government schools, for instance, is 5 times the gap between children with literate and illiterate mothers.
    Keywords: Primary Education,Education For All,Tertiary Education,Secondary Education,Teaching and Learning
    Date: 2006–11–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:4067&r=edu
  3. By: Eric A. Hanushek; Lei Zhang
    Abstract: Returns to education are traditionally estimated in a Mincer wage equation from the variation in schooling for a cross-section of individuals of different ages. Because individuals receive education at different time periods, when the quality of their education may not be identical, this method leads to an over- or under-estimation of the return to education of a given quality depending on how education quality evolves over time. This quality issue interacts with ability bias from self-selection into schooling and is particularly problematic when comparing returns across different countries. Using microdata from the International Adult Literacy Survey, we construct quality adjusted measures of schooling attained at different time periods and use these along with international literacy test information to estimate returns to skills for 13 countries. Estimated returns to quality-adjusted education are considerably higher than the traditional estimate for most countries, but these are offset to varying degrees by selection biases on ability. The combined corrections alter significantly the pattern of returns to schooling and skill seen from naïve Mincer wage equations.
    JEL: I2 J2
    Date: 2006–11
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:12664&r=edu
  4. By: James D. Adams; J. Roger Clemmons
    Abstract: This paper presents new evidence on research and teaching productivity in universities using a panel of 102 top U.S. schools during 1981-1999. Faculty employment grows at 0.6 percent per year, compared with growth of 4.9 percent in industrial researchers. Productivity growth per researcher is 1.4-6.7 percent and is higher in private universities. Productivity growth per teacher is 0.8-1.1 percent and is higher in public universities. Growth in research productivity within universities exceeds overall growth, because the research share grows in universities where productivity growth is less. This finding suggests that allocative efficiency of U.S. higher education declined during the late 20th century. R&D stock, endowment, and post-docs increase research productivity in universities, the effect of nonfederal R&D is less, and the returns to research are diminishing. Since the nonfederal R&D share grows and is higher in public schools, this may explain the rising inefficiency. Decreasing returns in research but not teaching suggest that most differences in university size are due to teaching.
    JEL: J3 L3 O3
    Date: 2006–11
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:12683&r=edu
  5. By: William R. Johnson
    Abstract: This paper estimates the dollar amount of public higher education subsidies received by U.S. youth and examines the distribution of subsidies and the taxes which finance them across parental and student income levels. Although youths from highincome families obtain more benefit from higher education subsidies, high-income households pay sufficiently more in taxes that the net effect of the spending and associated taxation is distributionally neutral or mildly progressive. These results are robust to alternative assumptions and are consistent with Hansen and Weisbrod’s earlier celebrated findings for California, although not with the conclusions often drawn from those findings.
    Keywords: : higher education, subsidy, progressivity Classification-JH23, I22
    Date: 2005–12
    URL: http://d.repec.org/n?u=RePEc:vir:virpap:365&r=edu
  6. By: Matthias Doepke
    URL: http://d.repec.org/n?u=RePEc:cla:uclaol:411&r=edu
  7. By: Wolfram F. Richter
    Abstract: Assuming decreasing returns to education and the endogenous supply of qualified and non-qualified labour it is shown to be efficient to supplement a consumption tax with positive incentives for education. If the return from education is isoelastic and if the choice is between (i) subsidizing the monetary cost of education and (ii) taxing nonqualified labour income more heavily than qualified labour income while keeping the effective cost of education constant, the latter policy is shown to be second-best efficient. In particular, any tax distortions should be constrained to labour choices while the choice of education should remain undistorted. The result holds for arbitrary utility functions.
    Keywords: endogenous choice of labour and education, efficient taxation, human capital investment, double dividend hypothesis
    JEL: H20 I20 J24
    Date: 2006
    URL: http://d.repec.org/n?u=RePEc:ces:ceswps:_1832&r=edu
  8. By: Eric A. Hanushek; Steven G. Rivkin
    Abstract: Substantial uncertainty exists about the impact of school quality on the black-white achievement gap. Our results, based on both Texas Schools Project (TSP) administrative data and the Early Childhood Longitudinal Survey (ECLS), differ noticeably from other recent analyses of the black-white achievement gap by providing strong evidence that schools have a substantial effect on the differential. The majority of the expansion of the achievement gap with age occurs between rather than within schools, and specific school and peer factors exert a significant effect on the growth in the achievement gap. Unequal distributions of inexperienced teachers and of racial concentrations in schools can explain all of the increased achievement gap between grades 3 and 8. Moreover, non-random sample attrition for school changers and much higher rates of special education classification and grade retention for blacks appears to lead to a significant understatement of the increase in the achievement gap with age within the ECLS and other data sets.
    JEL: H4 H7 I2 J15 J7 I1
    Date: 2006–10
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:12651&r=edu
  9. By: Eliot A. Jamison; Dean T. Jamison; Eric A. Hanushek
    Abstract: Previous work shows that higher levels of education quality (as measured by international student achievement tests) increases growth rates of national income. This paper begins by confirming those findings in an analysis involving more countries over more time with additional controls. We then use the panel structure of our data to assess whether the mechanism by which education quality appears to improve per capita income levels is through shifting the level of the production function (probably not), through increasing the impact of an additional year of education (probably not), or through increasing a country's rate of technological progress (very likely). Mortality rates complement income levels as indicators of national well-being and we extend our panel models to show that improved education quality increases the rate of decline in infant mortality. Throughout the analysis, we find a stronger impact of education quality and of years of schooling in open than in closed economies.
    JEL: F4 I2 J0 J21 O4 I1
    Date: 2006–10
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:12652&r=edu
  10. By: Migali, Giuseppe (University of Warwick)
    Abstract: In a world where graduate incomes are uncertain and higher education is financed through governmental loans, we build a theoretical model to show whether an income contingent loan (ICL) or a mortgage loan (ML) is preferred for higher levels of uncertainty. Assuming a single lifetime shock on graduate incomes, we compare the individual expected utilities under the two loan schemes, for both risk neutral and risk averse individuals. The theoretical model is calibrated using real data on wage uncertainty and considering the features of the UK Higher Education Reform to observe the implications of the switch from a ML to an ICL and the effect of the top-up fees. Different scenarios are simulated according to individual characteristics and family background. We finally extend the initial model to incorporate stochastic changes of income over time.
    Keywords: Education Choice ; Risk Aversion ; Uncertainty
    JEL: D81 I22 H80
    Date: 2006
    URL: http://d.repec.org/n?u=RePEc:wrk:warwec:775&r=edu
  11. By: Kalenkoski, Charlene Marie (Ohio University); Sabrina Wulff Pabilonia (U.S. Bureau of Labor Statistics)
    Abstract: Using nationally representative data from the NLSY97 and a simultaneous equations model, this paper analyzes the financial motivations for and the effects of employment on U.S. college students’ academic performance. The data confirm the predictions of the theoretical model that lower parental transfers and greater costs of attending college increase the number of hours students work while in school, although students are not very responsive to these financial motivations. They also show that increased hours of work lead to lower grade point averages (GPAs), at least for students attending four-year colleges.
    Keywords: employment, transfers, GPA
    JEL: D1 I2 J22
    Date: 2006–11
    URL: http://d.repec.org/n?u=RePEc:bls:wpaper:ec060130&r=edu
  12. By: Guillaume Haeringer; Flip Klijn
    Abstract: Recently, several school districts in the US have adopted or consider adopting the Student-Optimal Stable Mechanism or the Top Trading Cycles Mechanism to assign children to public schools. There is clear evidence that for school districts that employ (variants of) the so-called Boston Mechanism the transition would lead to efficiency gains. The first two mechanisms are strategy-proof, but in practice student assignment procedures impede students to submit a preference list that contains all their acceptable schools. Therefore, any desirable property of the mechanisms is likely to get distorted. We study the non trivial preference revelation game where students can only declare up to a fixed number (quota) of schools to be acceptable. We focus on the stability of the Nash equilibrium outcomes. Our main results identify rather stringent necessary and sufficient conditions on the priorities to guarantee stability. This stands in sharp contrast with the Boston Mechanism which yields stable Nash equilibrium outcomes, independently of the quota. Hence, the transition to any of the two mechanisms is likely to come with a higher risk that students seek legal action as lower priority students may occupy more preferred schools.
    Keywords: school choice, matching, stability, Gale-Shapley deferred acceptance algorithm, top trading cycles, Boston mechanism, acyclic priority structure, truncation
    JEL: C78 D78 I20
    Date: 2006–11–06
    URL: http://d.repec.org/n?u=RePEc:aub:autbar:671.06&r=edu
  13. 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
    URL: http://d.repec.org/n?u=RePEc:tuf:tuftec:0618&r=edu
  14. By: Åse Gornitzka & Johan P. Olsen
    Keywords: institutions; governance; educational policy
    Date: 2006–01–30
    URL: http://d.repec.org/n?u=RePEc:erp:arenax:p0213&r=edu
  15. By: Daniel Mejía; Marc St-Pierre
    Abstract: This paper develops a tractable, heterogeneous agents general equilibrium model where individuals have different endowments of the factors that complement the schooling process. The paper explores the relationship between inequality of opportunities, inequality of outcomes, and aggregate efficiency in human capital formation. Using numerical solutions we study how the endogenous variables of the model respond to two different interventions in the distribution of opportunities: a meanpreserving spread and a change in the support. The results suggest that a higher degree of inequality of opportunities is associated with lower average level of human capital, a lower fraction of individuals investing in human capital, higher inequality in the distribution of human capital, and higher wage inequality. In particular, the model does not predict a trade-off between aggregate efficiency in human capital formation (as measured by the average level of human capital in the economy) and equality of opportunity.
    Keywords: Human Capital, Inequality, Equity-Efficiency Trade-off. Classification JEL: J24; J31; O15; D33.
    URL: http://d.repec.org/n?u=RePEc:bdr:borrec:415&r=edu

This nep-edu issue is ©2006 by Joao Carlos Correia Leitao. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.