nep-edu New Economics Papers
on Education
Issue of 2007‒05‒12
eighteen papers chosen by
Joao Carlos Correia Leitao
University of the Beira Interior

  1. Returns to education in the economic transition : a systematic assessment using comparable data By Tiongson, Erwin R.; Paternostro , Stefano; Flabbi, Luca
  2. Want Economic Growth with Good Quality Institutions? Spend on Education By Mamoon, Dawood; Murshed, Mansoob
  3. Gone With the Wind? Hurricane Risk, Fertility and Education By Claus Portner
  4. Education and Economic Growth: A Case Study of Australia By Sawami Matsushita; Abu Siddique; Margaret Giles
  5. Does Female Schooling Reduce Fertility? Evidence from Nigeria By Una Okonkwo Osili; Bridget Terry Long
  6. Why is the Payoff to Schooling Smaller for Immigrants? By Paul W. Miller; Barry R. Chiswick
  7. College Education and Wages in the U.K.: Estimating Conditional Average Structural Functions in Nonadditive Models with Binary Endogenous Variables By Tobias J. Klein
  8. Education, Hypergamy and the "Success Gap" By Elaina Rose
  9. Mismatch in Law School By Jesse Rothstein; Albert Yoon
  10. Human Capital Spillovers and Economic Performance in the Workplace in 2004: Some British Evidence By Renuka Metcalfe; Peter J. Sloane
  11. Handedness, Time Use and Early Childhood Development By David W. Johnston; Manisha Shah; Michael A. Shields
  12. Why Study at a Mature Age? An Analysis of the Private Returns to Universtity Education in Australia By Andrew D. Colegrave
  13. Endogenous Longevity and Economic Growth By Jocelyn E. Finlay
  14. A Joint Econometric Model of Marriage and Partner Choice By Elaina Rose
  15. CSR and Social Marketing: What is the desired role for Universities in fostering Public Policies? By Leitão, João; Silva, Maria José
  16. Capital humano: Un análisis comparativo Catalunya-España By José-Luis Raymond; José-Luis Roig
  17. Retornos a la Educación Privada en el Perú By Sebastian Calónico; Hugo Ñopo
  18. Academic Research, Social Interactions and Economic Growth By Carillo, Maria Rosaria; Papagni, Erasmo

  1. By: Tiongson, Erwin R.; Paternostro , Stefano; Flabbi, Luca
    Abstract: This paper examines the assertion that returns to schooling increase as an economy transitions to a market environment. This claim has been difficult to assess as existing empirical evidence covers only a few countries over short time periods. A number of studies find that returns to education increased from the " pre-transition " period to the " early transition " period. It is not clear what has happened to the skills premium through the late 1990s, or the period thereafter. The authors use data that are comparable across countries and over time to estimate returns to schooling in eight transition economies (Bulgaria, Czech Republic, Hungary, Latvia, Poland, Russia, Slovak Republic, and Slovenia) from the early transition period up to 2002. In the case of Hungary, they capture the transition process more fully, beginning in the late 1980s. Compared to the existing literature, they implement a more systematic analysis and perform more comprehensive robustness checks on the estimated returns, although at best they offer only an incomplete solution to the problem of endogeneity. The authors find that the evidence of a rising trend in returns to schooling over the transition period is generally weak, except in Hungary and Russia where there have been sustained and substantial increases in returns to schooling. On average, the estimated returns in the sample are comparable to advanced economy averages. There are, however, significant differences in returns across countries and these differentials have remained roughly constant over the past 15 years. They speculate on the likely institutional and structural factors underpinning these results, including incomplete transition and significant heterogeneity and offsetting developments in returns to schoolin g within countries.
    Keywords: Education For All,Primary Education,Teaching and Learning,Education Reform and Management,Access & Equity in Basic Education
    Date: 2007–05–01
  2. By: Mamoon, Dawood; Murshed, Mansoob
    Abstract: The purpose of this paper is to compare the role of human capital accumulation measured by number of years of schooling with the relative contribution of institutional capacity to prosperity. We employ several concepts of institutional quality prevalent in the literature. We discover that developing human capital is as important as superior institutional functioning for economic wellbeing. Indeed, the accumulation of human capital stocks via increased education might lead to improved institutional functioning, and the utilisation of policies like trade liberalisation.
    Keywords: Growth; Institutions; Human Capital.
    JEL: I28 P36 I21
    Date: 2007–05
  3. By: Claus Portner
    Abstract: This paper uses data on hurricanes in Guatemala over the last 120 years combined with a recent household survey to analyse how decisions on education and fertility respond to hurricane risk and shocks. For households with land an increase in the risk of hurricanes lead to both higher fertility and higher education, while households without land have fewer children but also higher education. Hurricane shocks lead to decreases in both fertility and education, and although there is a substantial compensatory effect on fertility later in life, that is not the case for education. The paper examines a number of possible explanations for these patterns and finds that the most likely explanation is insurance considerations through increased available labour and migration.
    Date: 2006–10
  4. By: Sawami Matsushita (Centre for Labour Market Research, The University of Western Australia); Abu Siddique (Business School, The University of Western Australia); Margaret Giles (Business School, The University of Western Australia)
    Abstract: The purpose of this paper is to measure the contribution of education to growth in per capita real GDP in Australia over the period 1969-2003 using the growth accounting method. Also estimated is the contribution of total factor productivity to growth. Over the period, per capita real GDP in Australia increased by 1.9 percent per annum. Of this, about 31 percent was contributed by education. This finding has important implications for policy makers in Australia. For example, in order to promote economic growth in coming years, access to post compulsory education, particularly vocational education and training and higher education, for all Australians should be made easier and cheaper. This contradicts recent trends at the federal level towards increasing the student share of education costs.
    Keywords: Growth Accounding, Education, Economic Growth
    JEL: O47 O56 I29
    Date: 2006
  5. By: Una Okonkwo Osili; Bridget Terry Long
    Abstract: The literature generally points to a negative relationship between female education and fertility. Citing this pattern, policymakers have advocated educating girls and young women as a means to reduce population growth and foster sustained economic and social welfare in developing countries. This paper tests whether the relationship between fertility and education is indeed causal by investigating the introduction of universal primary education in Nigeria. Exploiting differences by region and age, the paper uses differences-in-differences and instrumental variables to estimate the role of education in fertility. The analysis suggests that increasing education by one year reduces fertility by 0.26 births.
    JEL: I2 J13 O10
    Date: 2007–04
  6. By: Paul W. Miller (Department of Economics, The University of Western Australia); Barry R. Chiswick (Department of Economics, The University of Illinois at Chicago)
    Abstract: This paper is concerned with why immigrants appear to have consistently lower partial effects of schooling on earnings than the native born, both across destinations and in different time periods within countries. It uses the Over-Required-Under education approach to occupations, a new decomposition technique developed especially for this approach, and data from the 2000 Census of the United States. Based on the average (mode or mean) level of schooling in their occupation, the schooling of the native and foreign born adult men is divided into the “required” (average) level, and years of under- or over-education. Immigrants have a wider variance in schooling, with an especially large proportion undereducated given the average schooling level in their occupation. Immigrants are shown to receive approximately the same rate of return to the “required” (occupational norm) level of education, but experience a smaller negative effect of years of undereducation, and to a lesser extent a small positive effect of overeducation. About two-thirds of the smaller effect of schooling on earnings for immigrants is due to their different payoffs to undereducation and overeducation. The remainder is largely due to their different distribution of years of schooling. The country-of-origin differences in the returns to under- and over-education are consistent with country differences in the international transferability of skills to the US and the favorable selectivity of economic migrants, especially those from countries other than the English-speaking developed countries. The decomposition developed is used to quantify the contribution of favorable selection in immigration and the less-than-perfect international transferability of skills. The results suggest that favorable selection is the more important contributor to the smaller payoff to schooling for immigrants.
    Keywords: Immigrants, Schooling, Occupations, Earnings, Rates of Return, Selectivity
    JEL: F22 I21 J24 J31 J61
    Date: 2006
  7. By: Tobias J. Klein (University of Mannheim and IZA)
    Abstract: We propose and implement an estimator for identifiable features of correlated random coefficient models with binary endogenous variables and nonadditive errors in the outcome equation. It is suitable, e.g., for estimation of the average returns to college education when they are heterogeneous across individuals and correlated with the schooling choice. The estimated features are of central interest to economists and are directly linked to the marginal and average treatment effect in policy evaluation. The advantage of the approach that is taken in this paper is that it allows for non-trivial selection patterns. Identification relies on assumptions weaker than typical functional form and exclusion restrictions used in the context of classical instrumental variables analysis. In the empirical application, we relate wage levels, wage gains from a college degree and selection into college to unobserved ability. Our results yield a deepened understanding of individual heterogeneity which is relevant for the design of educational policy.
    Keywords: returns to college education, correlated random coefficient model, local instrumental variables, local linear regression
    JEL: C14 C31 J31
    Date: 2007–04
  8. By: Elaina Rose
    Abstract: It is commonly believed that women tend to marry more successful men (i.e., that there is “hypergamy” with respect to success) and that success hampers women’s marriage prospects. Using education as a proxy for success, I test these two hypotheses. The “success gap” is the difference between the proportion of women with twelve years of education who are married and the proportion of women with graduate or professional degrees who are married. The success gap for women age 40-44 declined significantly in the 1980’s and 1990’s. In fact, according to some measures, the gap has disappeared. Hypergamy has declined as well. What has changed is that marriage rates for the less-educated have declined precipitously, although the patterns differ for blacks and for whites. I also track education-marriage and education-motherhood profiles.
    Date: 2006–04
  9. By: Jesse Rothstein (Princeton University and NBER); Albert Yoon (Northwestern University)
    Abstract: An important criticism of affirmative action policies in admissions is that they may hurt minority students who are thereby induced to attend selective schools. We use two comparisons to identify so-called “mismatch” effects in law schools, with consistent results. Black students attain better employment outcomes than do whites with similar credentials. Any mismatch effects on graduation and bar exam passage rates are confined to the bottom quintile of the entering credentials distribution, where selection bias is an important, potentially confounding factor. Elite law schools’ use of affirmative action thus does not appear to generate mismatch effects.
    Date: 2006–02
  10. By: Renuka Metcalfe (WELMERC, University of Wales Swansea); Peter J. Sloane (WELMERC, University of Wales Swansea and IZA)
    Abstract: This paper considers the impact of education and training on both individual and co-worker pay and establishment performance using the matched employer-employee data in WERS 2004, the panel dataset 1998-2004 and the new Financial Performance Questionnaire. This enables us to assess the impact of workplace education and training using both subjective (managers’ assessments) and objective data on productivity, profits and establishment survival. We establish that workplace education and training can have positive impacts on establishment financial performance, survival and growth. In contrast to extant studies, it was found that the square and the interaction between own and co-workers years of training also have a positive and significant impact on hourly pay. We find evidence indicating that establishments with 60% or more of workers trained have a higher establishment performance and also have a powerful impact on the likelihood of establishment survival.
    Keywords: human capital, spillovers, education, training, productivity, profitability, establishment survival
    JEL: I2 J4
    Date: 2007–05
  11. By: David W. Johnston (University of Melbourne); Manisha Shah (University of Melbourne); Michael A. Shields (University of Melbourne and IZA)
    Abstract: We test if there is a differential in early child development by handedness, using a comprehensive range of measures covering, learning, social, cognitive and language skills, evaluated by both interviewer conducted tests and teacher assessments. We find robust evidence that left-handed children do significantly worse in nearly all measures of development, with the relative disadvantage being larger for boys than girls. Importantly, these differentials cannot be explained by different socio-economic characteristics of the household, parental attitudes or investments in learning resources. In addition, using data from child time use diaries, we find evidence that lefthanded children spend significantly less time each day on educational activities than their righthanded peers, and significantly more time watching television. However, these behavioural differences explain less than 10% of the handedness child development differential. The results of this paper clearly show that handedness differentials are evident even in early childhood.
    Keywords: handedness, child development, child time use, parental characteristics
    JEL: J13 I21
    Date: 2007–04
  12. By: Andrew D. Colegrave (Department of Economics, The University of Western Australia)
    Abstract: Using data from the 2001 Australian Census of Population and Housing, this article estimates private rates of return to university education at the bachelor degree level for males and females, and determines the age threshold when studying for university qualifications becomes no longer worthwhile. Employing a methodology analogous to Borland (2002), the results indicate that the rates of return for individuals undertaking three year university degrees at the median commencement age of 19 years are 24.8 per cent for males and 20.6 per cent for females; and that returns continue to outperform share market investments right up until males begin their studies in their late thirties and females, much later, in their mid fifties. This article has important policy implications for the problems associated with skilled-labour shortages and the ageing population. Greater subsidizing of tuition fees and extension of the retirement age are suggested to make the education investment of mature age individuals even more profitable.
    Date: 2006
  13. By: Jocelyn E. Finlay (PGDA, Harvard School of Public Health)
    Abstract: In a two period overlapping generations model of endogenous longevity and economic growth, individuals choose to invest in health and education. The investments are costly in terms of foregone first period consumption and the benefit is in the second period where health has the effect of increasing the probability of survival, and education investment will bring higher income. These investments are risky as survival through period two, when the payoffs can be had, is not certain. Individuals with varying degrees of risk aversion will choose the ordering in which they invest in health and education. It is only when investment in education is achieved that an economy will experience endogenous growth.
    Keywords: Endogenous Longevity, Endogenous Growth, Health, Risk
    Date: 2006–09
  14. By: Elaina Rose
    Abstract: This paper develops a joint model of the marriage and partner choice decisions. Given her own characteristics and the marriage market, a woman determines her optimal feasible partner type. Given this type, she decides whether or not to marry based on her utility when married and her utility when single. This generates a selection model. The partner choice equation is estimated only for married women. Husband’s education depends on wife’s characteristics and market variables. In the selection equation, the likelihood of marriage depends on these variables as well as parents’ religion and religiosity, and the gender of the woman’s firstborn child. I estimate the model using data from the Panel Study of Income Dynamics (PSID). The results indicate that there is substantial positive selection into marriage, particularly for men. There is a small downward bias selection bias on the estimate of the effect of own education on spouse’s education, and a much larger downward bias on the effect of “white”.
    Date: 2006–02
  15. By: Leitão, João; Silva, Maria José
    Abstract: The paper aims to identify the role of Universities in fostering public policies, through the promotion of social responsibility, and the implementation of social marketing initiatives. This innovative approach is particularly interesting since the literature does not cover, until now, the importance of adopting a social responsibility strategy within Universities, in order to foster public policies for development. First, Corporate Social Responsibility should be developed at Universities. For this purpose, an integrative approach that embraces marketing, economic, ecological, and social aspects is proposed, through the design of a strategic action plan, which includes three operational levels: analysis, implementation and assessment. Second, in order to foster the impact of public policies for development, social marketing initiatives should be implemented among institutional and social networks where Universities assume an increasing strategic role.
    Keywords: Corporate Social Responsibility; Government Policy; Social Marketing.
    JEL: I28 M31 M14
    Date: 2007–04–25
  16. By: José-Luis Raymond (Grup d'Anàlisi Econòmica Aplicada (GEAP), Departament d'Economia i Història Econòmica, Universitat Autònoma de Barcelona); José-Luis Roig (Grup d'Anàlisi Econòmica Aplicada (GEAP), Departament d'Economia Aplicada, Universitat Autònoma de Barcelona)
    Abstract: En este documento se analizan comparativamente algunos aspectos relativos al capital humano de la economía catalana y española. En primer lugar se compara la dotación de capital humano tanto desde una metodología más tradicional, como es el caso de años de educación, como desde el punto de vista de la valoración del activo mediante actualización de flujos salariales a lo largo del ciclo vital de los individuos. Los resultados muestran indicios de una cierta desaceleración en el crecimiento del stock de capital humano. Adicionalmente, se lleva a cabo una estimación de la existencia de externalidades de capital humano intra-establecimiento, con datos de la Encuesta de Estructura Salarial, desarrollando una metodología menos restrictiva que la tradicional. Los resultados muestran comportamientos similares de la economía española y catalana, apuntando a la existencia de externalidades.
    Keywords: Capital humano, salarios, externalidades
    JEL: J24 I20
    Date: 2006–12
  17. By: Sebastian Calónico (Inter-American Development Bank); Hugo Ñopo (Inter-American Development Bank)
    Abstract: La provisión privada de servicios educativos ha venido representando una proporción creciente del sistema educativo peruano, especialmente durante las últimas décadas. Mientras que han existido muchas quejas respecto a las diferencias en cuanto a calidad entre las escuelas públicas y privadas, no existe una evaluación completa acerca de los diferentes impactos de estos dos tipos de proveedores en el mercado de trabajo. Este trabajo constituye un intento de proveer tal visión comprensiva, para lo que vamos a explorar las diferencias publico-privadas en los retornos individuales a la educación en el Perú urbano. Haciendo uso de dos importantes bases de datos (ENNIV 1997 y 2000) que incluyen preguntas sobre el tipo de educación (pública vs. privada) para cada nivel educativo (primaria, secundaria, terciario técnico y universitario) sobre una muestra representativa de adultos, somos capaces de medir las diferencias en ingresos laborales para todas las posibles trayectorias educativas. Los resultados muestran mayores retornos a la educación para aquellos que atendieron escuelas privadas que aquellos que atendieron el sistema público. No obstante, estos mayores retornos son también mayores en cuanto a dispersión, reflejando una mayor heterogeneidad en la calidad del sistema privado. Las diferencias publico-privadas en los retornos son mas pronunciadas a nivel del secundario que en cualquier otro nivel. Por otro lado, estas diferencias en los retornos por educación técnica son casi inexistentes. Un enfoque de cohortes junto a una técnica de ventanas corredizas nos permite capturar la evolución generacional de las diferencias publico-privadas. Los resultados indican que estas diferencias se han venido expandiendo en las últimas dos décadas.
    Keywords: Retornos a la Educación; salarios
    JEL: J31 I2
    Date: 2007–02
  18. By: Carillo, Maria Rosaria; Papagni, Erasmo
    Abstract: In this paper we investigate the aggregate implications of social interactions for basic research and economic growth. In particular, we focus on the effects of both the size of the scientific community and the strenght of social exchange among researchers on science productivity and uneven growth. Basic research is modelled as a contest which awards a real prize to the winner and nothing to the losers. Agents are endowed with heterogeneous talent and discoveries are uncertain events which depend on the talent and effort of individuals and on their aggregate values. A CES index of the distribution of both talent and effort summarizes the features of the interactions of the scientific community from which increasing returns may derive. According to the model in equilibrium scientists endowed with higher ability put higher effort into their job, which justifies the famous Lotka effect on the skewed distribution of scientific publications. Social interactions among scientists cause increasing returns to the number of scientists and multiple equilibria, among which a poverty trap with zero knowledge production and zero growth may emerge. Since only the most talented agents join the science sector, economic growth depends positively on its size. Sensitivity analysis of the model shows that if the scientific community is made by on average less complementary people and its size is greater than a threshold then in equilibrium this community will be larger and the growth rate greater. The same effects derive both from a stronger influence of the scientific environment on the aggregate probability of success in scientific races and from a higher share of real resources devoted to basic research.
    JEL: Z13 J24 O41
    Date: 2007–05–04

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