nep-edu New Economics Papers
on Education
Issue of 2007‒01‒13
fourteen papers chosen by
Joao Carlos Correia Leitao
University of the Beira Interior

  1. Conditional cash transfers and female schooling : the impact of the female school stipend program on public school enrollments in Punjab, Pakistan By Chaudhury, Nazmul; Parajuli, Dilip
  2. Incentives to Learn By Michael Kremer; Edward Miguel; Rebecca Thorton
  3. The Role of the University in Attracting High Tech Entrepreneurship: A Silicon Valley Tale By David Huffman; John Quigley
  4. Incentives for Schools, Educational Signals and Labour Market Outcomes By Uschi Backes-Gellner; Stephan Veen
  5. Education and Crime over the Life Cycle By Giulio Fella; Giovanni Gallipoli
  6. Religious Schools, Social Values and Economic Attitudes: Evidence from Bangladesh By Mohammad Niaz Asadullah (Reading University) and Nazmul Chaudhury (World Bank)
  7. Orphans and Schooling in Africa: A Longitudinal Analysis By David Evans; Edward Miguel
  8. University Decentralization as Regional Policy: The Swedish Experiment By Roland Andersson; John Quigley; Mats Wilhelmsson
  9. Investment in Schooling and the Marriage Market By Pierre-Andre Chiappori; Yoram Weiss; Murat Iyigun; Yoram Weiss
  10. Urbanization, Productivity and Innovation: Evidence from Investment in Higher Education By Roland Andersson; John Quigley; Mats Wilhelmsson
  11. The Role of Education in Economic Growth through the Sectoral Reallocation of Labor By Soohyung Lee
  12. The Incentive Effects of Property Taxation: Evidence from Norwegian School Districts By Jon H. Fiva and Marte Rønning
  13. Restructuring Research: Communication Costs and the Democratization of University Innovation By Ajay K. Agrawal; Avi Goldfarb
  14. The College Admissions Problem Under Uncertainty By Hector Chade; Greg Lewis; Lones Smith

  1. By: Chaudhury, Nazmul; Parajuli, Dilip
    Abstract: Instead of mean-tested conditional cash transfer (CCT) programs, some countries have implemented gender-targeted CCTs to explicitly address intra-household disparities in human capital investments. This study focuses on addressing the direct impact of a female school stipend program in Punjab, Pakistan: Did the intervention increase female enrollment in public schools? To address this question, the authors draw on data from the provincial school censuses of 2003 and 2005. They estimate the net growth in female enrollments in grades 6-8 in stipend eligible schools. Impact evaluation analysis, including difference-and-difference (DD), triple differencing (DDD), and regression-discontinuity design (RDD) indicate a modest but statistically significant impact of the intervention. The preferred estimator derived from a combination of DDD and RDD empirical strategies suggests that the average program impact between 2003 and 2005 was an increase of six female students per school in terms of absolute change and an increase of 9 percent in female enrollment in terms of relative change. A triangulation effort is also undertaken using two rounds of a nationally representative household survey before and after the intervention. Even though the surveys are not representative at the subprovincial level, the results corroborate evidence of the impact using school census data.
    Keywords: Education For All,Primary Education,Tertiary Education,Gender and Education,Education Reform and Management
    Date: 2006–12–01
  2. By: Michael Kremer (Department of Economics, Harvard University); Edward Miguel (Department of Economics, University of California, Berkeley); Rebecca Thorton (Department of Economics, Harvard University)
    Abstract: We report results from a randomized evaluation of a merit scholarship program for adolescent girls in Kenya. Girls who scored well on academic exams had their school fees paid and received a cash grant for school supplies. Girls eligible for the scholarship showed significant gains in academic exam scores (average gain 0.12-0.19 standard deviations) and these gains persisted following the competition. There is also evidence of positive program externalities on learning: boys, who were ineligible for the awards, also showed sizeable average test gains, as did girls with low pretest scores, who were unlikely to win. Both student and teacher school attendance increased in the program schools. We discuss implications both for understanding the nature of educational production functions and for the policy debate surrounding merit scholarships.
    Keywords: Education, merit scholarships, externalities,
    Date: 2006–06–27
  3. By: David Huffman (University of California, Berkeley); John Quigley (University of California, Berkeley)
    Abstract: Among the many sorting functions provided by institutions of higher education, there is a geographic dimension. During the years spent as students and residents of local communities, students develop specific networks and contacts, and perhaps their tastes change as well. After graduation, these students may be more likely to reside in the locality or region in which they have been educated.This paper presents evidence which suggests that the university is important in attracting human capital to the local area and in stimulating entrepreneurial talent in the region.We also measure the strength of the impact of the university on geographical location in one specific instance. For post-graduate professional business and engineering students at Berkeley, we compare the spatial distribution of residences before attending the university and again after graduation.The results are suggestive of the importance of academic institutions in the geographic pattern of agglomerations of footloose scientific firms, such as those in the Silicon Valley just south of San Francisco. The results also reinforce the self-interested reasons for government investment in high-quality educational institutions, as measured by the return on the augmented human capital stock in the region.
    Date: 2006–06–27
  4. By: Uschi Backes-Gellner (Institute for Strategy and Business Economics, University of Zurich); Stephan Veen (Institute for Strategy and Business Economics, University of Zurich)
    Abstract: Central exams have been discussed as an incentive to improve educational outcomes. In our paper we study the impact of central exams on labor market outcomes. We explain the quality choice of schools under central and non-central exams and model the resulting students’ schooling decisions and employers’ wage decisions. We use the German Abitur and the variation among the German federal states with respect to central exams as a quasi experimental design. We expect the ratio of Abitur holders to increase in states without central exams and their wage premiums to decrease at the same time. In states with central exams these effects should not occur. We test our implications with official statistics on education and with the GSOEP. The first two implications are born out in the data. Finally, explanations and policy recommendations are discussed.
    Keywords: Educational Economics, School choice, Incentives for Schools, Central Exams, Economic impact, Labor Market Outcome
    JEL: M51 J31
    Date: 2006–06
  5. By: Giulio Fella (Economics Queen Mary, University of London); Giovanni Gallipoli
    Abstract: This paper provides a framework within which to study the equilibrium impact of alternative policies. We develop an overlapping generation, life-cycle model with endogenous education and crime choices. Education and crime depend on different dimensions of heterogeneity, which takes the form of differences in innate ability and wealth at birth as well as employment shocks. The model is calibrated to match education enrolments, aggregate (property) crime rate and some features of the wealth distribution. In our numerical experiments we find that policies targeting crime reduction through increases in high school graduation rates are more cost-effective than simple incapacitation policies. The cost-effectiveness of high school subsidies increases significantly if they are targeted at the wealth poor. Financial incentives to high school graduation have radically different implications in general and partial equilibrium
    Keywords: Crime, Education, Life Cycle
    JEL: E26 H52 I28 K42
    Date: 2006–12–03
  6. By: Mohammad Niaz Asadullah (Reading University) and Nazmul Chaudhury (World Bank)
    Abstract: This paper examines the social impact of a madrasa (Islamic religious school) reform program in Bangladesh. The key features of the reform are change of the curriculum and introduction of female teachers. We assess whether the reform is making any contribution in improving social cohesion in rural areas. We use new data on teachers and female graduates from rural Bangladesh and explore how attitudes toward desired fertility, working mothers, higher education for girls vis-à-vis boys, and various political regimes vary across secondary schools and modernised madrasas. We find some evidence of attitudinal gaps by school type. Modernised religious education is associated with attitudes that are conducive to democracy. On the other hand, when compared to their secular schooled peers, madrasa graduates have perverse attitude on matters such as working mothers, desired fertility and higher education for girls. We also find that young people's attitudes are interlinked with that of their teachers. Exposure to female and younger teachers leads to more favourable attitudes among graduates. These estimated effects are robust to conditioning on a rich set of individual, family and school traits. We conclude by discussing other social and economic implications of these findings.
  7. By: David Evans (Department of Economics, Harvard University); Edward Miguel (Department of Economics, University of California, Berkeley)
    Abstract: AIDS deaths could have a major impact on economic development by affecting the human capital accumulation of the next generation. We estimate the impact of parent death on primary school participation using an unusual five-year panel data set of over 20,000 Kenyan children. There is a substantial decrease in school participation following a parent death, and a smaller drop before the death (presumably due to pre-death morbidity). Estimated impacts are smaller in specifications without individual fixed effects, suggesting that estimates based on cross-sectional data are biased toward zero. Effects are largest for children whose mothers died, and those with low baseline academic performance.
    Keywords: Parent death, education, HIV/AIDS, Africa,
    Date: 2006–06–27
  8. By: Roland Andersson (Royal Institute of Technology, Stockholm); John Quigley (University of California at Berkeley); Mats Wilhelmsson (Royal Institute of Technology, Stockholm)
    Abstract: During the past fifteen years, Swedish higher education policy has emphasized the spatial decentralization of post-secondary education. We analyze this policy as a natural experiment, and we investigate the economic effects of this decentralization on productivity and output. We rely upon a twelve-year panel of output, employment and investment for Sweden's 285 municipalities, together with data on the location of university researchers and students, to estimate the effects of exogenous changes in educational policy upon regional development. We find important and significant effects of this policy upon output and productivity, suggesting that the economic effects of the decentralization on regional development are economically important.
    Date: 2006–06–27
  9. By: Pierre-Andre Chiappori; Yoram Weiss (Economics University of Colorado); Murat Iyigun; Yoram Weiss
    Abstract: We produce a model with pre-marital schooling investment, endogenuos marital matching and spousal specialization in homework and market production. Schooling investments generate two kinds of returns in our framework: a labor-market return due to the education premium and a marriage-market return because education can improve the intra-marital share of the surplus one can extract from marriage. When the returns to education are gender neutral, men and women educate in equal proportions and there is pure positive assortative matching in the marriage markets. But if the returns are not gender neutral, then there is mixing in equilibrium where some educated individuals marry uneducated spouses and those who educate less because their labormarket return is lower extract a relatively larger share of the marital surplus. Conditional on the choice of schooling, couples’ career decisions affect the size of their marital surplus, but the existence of large and frictionless marriage markets can still produce efficient household specialization where the higher-wage spouse specializes in market production and the lower-wage spouse engages in homework. Even when cultural and social norms or the time requirements of homework dictate that wives devote relatively more time to homework, women can acquire more schooling than men if a gender wage gap exists but narrows with the level of education
    Keywords: Pre-Marital Investments, Intra-Household Allocations, Assortative Matching.
    JEL: C78 D61 D70
    Date: 2006–12–03
  10. By: Roland Andersson (Royal Institute of Technology, Sweden); John Quigley (University of California, Berkeley); Mats Wilhelmsson (Royal Institute of Technology, Sweden)
    Abstract: During the past fifteen years, Swedish government policy has decentralized post-secondary education throughout the country. We investigate the economic effects of this decentralization policy on the level of productivity and innovation and their spatial distribution in the Swedish economy. We analyze productivity, measured as output per worker at the level of the locality, for 284 Swedish communities during a 14 year period, and innovation, measured by commercial patents awarded in 100 Swedish labor market areas during an 8 year period. These economic outcomes, together with data documenting the decentralization of university-based researchers, permit us to estimate the effects of exogenous changes in educational policy upon increases in productivity and the locus of innovative activity. We find important and significant effects of this policy upon economic output and the locus of knowledge production, suggesting that the decentralization has affected regional development through local innovation and increased creativity. Moreover, our evidence suggests that aggregate productivity was increased by the deliberate policy of decentralization.
    Date: 2006–07–13
  11. By: Soohyung Lee
    Abstract: The main questions of this paper are as follows: Whether and to what extent does rising educational attainment contribute to a country's economic growth by facilitating the reallocation of labor from the agricultural sector to the non-agricultural sector? The transition from the agricultural sector to the non-agricultural sector ("transition" hereinafter) is an important aspect of a country's development. Consider China as an example. In China, around 70% of the labor force worked in the agricultural sector in 1980, whereas only 47% remained in the agricultural sector in 2000. Over the same period of time, China's gross domestic product (GDP) per capita increased from U.S. $173 to $856. In addition, cross-country data demonstrate that developed countries have a lower share of employment in agriculture than less-developed countries. For instance, high income countries had 4% of their employees engaged in the agricultural sector in 2000, whereas middle income countries had 40% of their employees working in the agricultural sector. In low income countries, the share may be even larger: in Bangladesh, for example, more than 60% of employees work in the agricultural sector. Based on these empirical observations, using calibration exercises a number of papers have demonstrated the possibility that income differences across countries can be explained by different onsets of transition (Gollin et al. 2002, 2004, Parente et al. 2000, Restuccia et al. 2003). In contrast, there is little empirical research based on micro-level data studying the factors that affect the speed of transition. As far as I am aware, the most closely related empirical study of transition was carried out by Jeong and Kim (2005) using data for Thailand. However, the authors focused more on replicating gradual transition than on determinants governing the speed of transition. They relied on the assumption of “sector specific complementarity between work-experience and labor†to explain the slow transition, but did not provide direct empirical evidence for this assumption. In contrast to existing research, this paper tries to shed light on one hypothesized factor affecting the speed of transition: raising educational attainment may facilitate the labor force moving from the agricultural sector to the non-agricultural sector. I use a Chinese household panel dataset--the China Health and Nutrition Survey (CHNS)--to measure the extent to which educational attainment raises the probability of a worker obtaining a non-agricultural job. To extract the causal effect of education, I use the increase in the number of secondary schools during the Cultural Revolution (CR) in China (1966 to 1976) as an instrumental variable. Reducing the differences between the peasantry and the rest of the population was identified as being a major goal of the CR; as a result of this ideology, the policies of this period promoted mass education among underserved groups, including rural populations especially in terms of the secondary schooling (Hannum 1999). My preliminary results suggest that one more secondary school per 10,000 people in a province is correlated with an increase in 1.15 years of schooling. Using a Probit model with this instrumental variable, I estimate that one more year of schooling raises the probability a worker will obtain a non-agricultural job by 4.53%. However, what does this estimation imply for transition and aggregate economic growth? In China, the share employed in agriculture has decreased from 68.1% in 1982 to 50% in 2000 (Chinese Statistical Yearbook, 2003). On the other hand, the average years of schooling of workers in China has increased from 5.83 years to 7.66 years (Chinese Population Census 1982, 2000). Hence, this increase in schooling, 1.84 years, may have contributed 8.34% points to the decrease in the agricultural share of employment from 1982 to 2000. In terms of the real GDP growth, accurate growth accounting requires further study. However, a back-of-the-envelope calculation suggests that the decrease in the agricultural employment share due to rising educational attainment implies an increase of 0.65% points of the real GDP per worker growth per annum. Although the growth and level accounting remains to be done, I believe that this paper can contribute to the economic growth literature by testing whether and to what extent education causes growth. Within this research literature, many papers have suggested the possibility of a causal effect of education on growth, but a recent study by Bils and Klenow (2000) questions this causal relationship. For example, if we include the role of education in sectoral reallocation (0.65% point), the contribution of education to the annual growth rate of the real GDP per worker increases from about 20% to 32%. Therefore, we can conclude that education causes growth (at least 12%) and that its contribution to growth is significant
    Keywords: Education; Sectoral Shift; Transition; China
    JEL: O1 O5 I2 J6
    Date: 2006–12–03
  12. By: Jon H. Fiva and Marte Rønning (Statistics Norway)
    Abstract: Recent theoretical contributions indicate favorable incentive effects of property taxation on public service providers. The object of this paper is to confront these theories with data from Norwegian school districts. The institutional setting in Norway is well suited for analyzing the effects of property taxation because one can compare school districts with and without property taxation. To take into account potential endogeneity of the choice of implementing property taxation, we rely on instrumental variable techniques. The empirical results indicate that, conditional on resource use, property taxation improves school quality measured as students’ result on the national examination.
    Keywords: Property taxation; Disciplining device; Public sector quality
    JEL: C21 H71 I22
    Date: 2006–10
  13. By: Ajay K. Agrawal; Avi Goldfarb
    Abstract: We report evidence indicating that Bitnet adoption facilitated increased research collaboration between US universities. However, not all institutions benefited equally. Using panel data from seven top engineering journals, Bitnet connection records, and a variety of institution ranking data, we find that medium-ranked universities were the primary beneficiaries; they benefited largely by increasing their collaboration with top-ranked schools. Furthermore, we find that the magnitude of this effect was greatest for co-located pairs. These results suggest that the most salient effect of lowering communication costs may have been to facilitate gains from trade through the specialization of research tasks. Thus, the advent of Bitnet -- and likely subsequent versions, including the Internet -- seems to have increased the role of second-tier universities in the national innovation system as producers of new, high-quality knowledge.
    JEL: O33 R11 Z13
    Date: 2006–12
  14. By: Hector Chade (Arizona State University); Greg Lewis; Lones Smith
    Abstract: We consider a college admissions problem with uncertainty. We realistically assume that (i) students' college application choices are nontrivial because applications are costly, (ii) college rankings of students are noisy and thus uncertain at the time of application, and (iii) matching between colleges and students takes place in a decentralized setting. We analyze a general equilibrium model where two ranked colleges set admissions standards for student quality signals, and students, knowing their types, decide where to apply to. We show that the optimal student application portfolio need not be monotone in types, and we construct a robust example to show that this can lead to a failure of assortative matching in equilibrium. More importantly, we prove that a unique equilibrium with assortive matching exists provided application costs are small and the lower-ranked college has sufficiently high capacity. We also provide equilibrium comparative static results with respect to college capacities and application costs. We apply the model to the question of race-based admissions policies
    Keywords: matching, directed search, noise
    JEL: D82 D83
    Date: 2006–12–03

This nep-edu issue is ©2007 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 For comments please write to the director of NEP, Marco Novarese at <>. 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.