nep-edu New Economics Papers
on Education
Issue of 2008‒05‒17
eighteen papers chosen by
Joao Carlos Correia Leitao
University of the Beira Interior

  1. Success in the University Admission Process in Germany : Regional Provenance Matters By Sebastian Braun; Nadja Dwenger
  2. Higher Education: (Almost) Free Tuition vs. Quotas vs. Targeted Vouchers By Andrade, Eduardo C.
  3. Parents Investments and Education Returns By Francesc Dilme
  4. The Non-Cognitive Returns to Class Size By Thomas Dee; Martin West
  5. The private and fiscal returns to schooling and the effect of public policies on private incentives to invest in education: a general framework and some results for the EU By Angel de la Fuente; Juan Francisco Jimeno
  6. The Impact of Employment during School on College Student Academic Performance By Jeffrey S. DeSimone
  7. Sheepskin or Prozac: The Causal Effect of Education on Mental Health By Arnaud Chevalier; Leon Feinstein
  8. Intrahousehold Allocation of Education Expenditure and Returns to Education: The Case of Sri Lanka By Rozana Himaz
  9. Islamic finance education at graduate level: Current position and challenges By Hasan, Zubair
  10. Statutory Retirement Age and Lifelong Learning By Thomas Gries; Stefan Jungblut; Tim Krieger; Henning Meier
  11. Benefit Incidence of Public Spending on Education in the Philippines By Manasan, Rosario G.; Cuenca, Janet S.; Villanueva, Eden C.
  12. Possibilities of quality enhancement in higher education by intensive use of information technology By Mishra, SK
  13. When High Achievers Pay the Price for Higher Educational Standards By Andrade, Eduardo C.; Castro, Luciano I.
  14. Does the Housing Market React to New Information on School Quality? By Jon H. Fiva and Lars J. Kirkebøen
  15. Sell Side School Ties By Andrea Frazzini; Christopher Malloy; Lauren Cohen
  16. Parental Education and Parental Time With Children By Jonathan Guryan; Erik Hurst; Melissa Schettini Kearney
  17. Carreras académicas. Utilización del CV para la modelación de carreras académicas y científicas By Hernán Jaramillo Salazar; Carolina Lopera Oquendo; Carolina Albán Conto
  18. Do French student really bid sincerely? By Nicolas Jacquemet; Stephane Luchini; Robert-Vincent Joule; Jason Shogren

  1. By: Sebastian Braun; Nadja Dwenger
    Abstract: School education in Germany is under the responsibility of the federal states and as a consequence average grades differ widely across regions. Since school leavers apply nationwide for admission to university, regional provenance may thus matter a lot for the success probability in the admission process. Using a comprehensive dataset of the German central clearing house for university admissions in 2006/2007, we show that success rates indeed differ dramatically between federal states, provided that grades are not made comparable across state boundaries. Most of the variation in success can be explained by state-level differences in grading. By defining quotas for federal states and restricting competition among applicants to the state-level, the link between state-level grading and success rates in the university admission process can be broken.
    Keywords: Admission to university, central clearing house, federalism, federal education system
    JEL: C21 I23 H77
    Date: 2008
  2. By: Andrade, Eduardo C.
    Date: 2007–10
  3. By: Francesc Dilme (Universitat de Barcelona)
    Abstract: This paper analyses the relation between parents earnings and their childrens education. In a context of perfect altruism, the model describes parents decisions on how much to consume and how much to invest in their childrens education. The model predicts that returns on education in terms of wages should be linear. Using this model in a competitive economy, we show how the outcome depends on government subsidies or taxes on education. The usual tradeoff equality-efficiency arises in this context. Finally, the model provides some insights into the relation between education and productivity.
    Keywords: intergenerational altruism, education returns
    JEL: E24 J26 I22 I28 I32
    Date: 2008
  4. By: Thomas Dee; Martin West
    Abstract: Although recent evidence suggests that non-cognitive skills such as engagement matter for academic and economic success, there is little evidence on how key educational inputs affect the development of these skills. We present a re-analysis of follow-up data from the Project STAR class-size experiment and find evidence that early-grade class-size reductions did improve subsequent student initiative. However, these effects did not persist into the 8th grade. Furthermore, the external and, possibly, the internal validity of these inferences is compromised by non-random attrition. We also present a complementary analysis based on nationally representative survey data and a research design that relies on contemporaneous within-student and within-teacher comparisons across two academic subjects. Our results indicate that smaller classes in 8th grade lead to improvements in measures of student engagement with effect sizes ranging from 0.05 to 0.09 and smaller effects persisting two years later. Using the estimated earnings impact of these non-cognitive skills and the direct cost of a class-size reduction, the implied internal rate of return from an 8th-grade class-size reduction is 4.6 percent overall, but 7.9 percent in urban schools.
    JEL: I20 I21 I28
    Date: 2008–05
  5. By: Angel de la Fuente; Juan Francisco Jimeno
    Abstract: This paper develops a comprehensive framework for the quantitative analysis of the private and fiscal returns to schooling and of the effect of public policies on private incentives to invest in education. This framework is applied to 14 member states of the European Union. For each of these countries, we construct estimates of the private return to an additional year of schooling for an individual of average attainment, taking into account the effects of education on wages and employment probabilities after allowing for academic failure rates, the direct and opportunity costs of schooling, and the impact of personal taxes, social security contributions and unemployment and pension benefits on net incomes. We also construct a set of effective tax and subsidy rates that measure the effects of different public policies on the private returns to education, and measures of the fiscal returns to schooling that capture the long-term effects of a marginal increase in attainment on public finances under conditions that approximate general equilibrium.
    Keywords: returns to schooling
    JEL: I20 J31 H60
    Date: 2008–03–15
  6. By: Jeffrey S. DeSimone
    Abstract: This paper estimates the effect of paid employment on grades of full-time, four-year students from four nationally representative cross sections of the Harvard College Alcohol Study administered during 1993–2001. The relationship could be causal in either direction and is likely contaminated by unobserved heterogeneity. Two-stage GMM regressions instrument for work hours using paternal schooling and being raised Jewish, which are hypothesized to reflect parental preferences towards education manifested in additional student financial support but not influence achievement conditional on maternal schooling, college and class. Extensive empirical testing supports the identifying assumptions of instrument strength and orthogonality. GMM results show that an additional weekly work hour reduces current year GPA by about 0.011 points, roughly five times more than the OLS coefficient but somewhat less than recent estimates. Effects are stable across specifications, time, gender, class and age, but vary by health status, maternal schooling, religious background and especially race/ethnicity.
    JEL: I2 J22
    Date: 2008–05
  7. By: Arnaud Chevalier (Department of Economics, University of Kent, Canterbury, CT2 7NP, England Associate at the Centre for Economics of Education, London School of Economics, Geary Institute, University College Dublin & Institute for the Study of Labour, IZA, Bonn); Leon Feinstein (Institute of Education, Centre for Research on the Wider Benefits of Learning, 20 Bedford Way, London WC1H OAL, England Associate at the Centre for the Economics of Education, London School of Economics, England)
    Abstract: Mental illness is associated with large costs to individuals and society. Education improves various health outcomes but little work has been done on mental illness. To obtain unbiased estimates of the effect of education on mental health, we rely on a rich longitudinal dataset that contains health information from childhood to adulthood and thus allow us to control for fixed effects in mental health. We measure two health outcomes: malaise score and depression and estimate the extensive and intensive margins of education on mental health using various estimators. For all estimators, accounting for the endogeneity of education augments its protecting effect on mental health. We find that the effect of education is greater at mid-level of qualifications, for women and for individuals at greater risk of mental illness. The effects of education are observed at all ages, additionally education also reduces the transition to depression. These results suggest substantial returns to education in term of improved mental health.
    Keywords: Returns to education, mental health
    JEL: I12 I29
    Date: 2007–06–08
  8. By: Rozana Himaz
    Abstract: This paper uses demand analysis to explore whether intrahousehold allocation of education expenditure differs between boys and girls in rural Sri Lanka. Contrary to most countries in South Asia a significant bias favouring girls is found in 1990/91 for the 5-9 and 17-19 age groups and in 1995/96 for the 5-9 and 14-16 age groups. The 5-9 age group captures the run-up to the Year 5 scholarship exams that are used to gain entry into better performing secondary schools. The 14-16 and 17-19 age groups capture those who read for important National level qualifications vital in the job market. The paper argues that these household level decisions are rational because wage returns to junior and senior secondary education have been higher for females than for males through the 1980s and 1990s.
    Keywords: Intrahousehold Allocation, Returns to Education, Gender
    JEL: D13 I21 J16
    Date: 2008
  9. By: Hasan, Zubair
    Abstract: Over the past few decades Islamic finance has been the fastest growing segment of the global system. The fast growing market has necessitated corresponding expansion of education and training facilities to increase appropriately the supply of skilled manpower. This called for a stock taking of the adequacy and suitability of the existing educational and training facilities in several directions. IRTI has launched a project to accomplish this work. The present working paper looks at the range, sufficiency and quality of education in Islamic finance at the graduate level. It uses Malaysia as an illustrative case because the country is in the forefront of this development and has made several innovations and pioneering efforts in the field. This work finds that the graduate level finance education is not currently in a very satisfactory state. This is partly reflected in the increasing departure of financing expedients from the major goals of the Islamic system. The difference between the legality of transactions and their permissibility is usually ignored giving rise to perilous divisions at the juridical level. Validation of mixed banking opened the doors for convergence with the mainstream presumably to the disadvantage of Islamic finance long run, in education also. Some other points of significance that emanate from the foregoing discussion are in brief as under. 1. The unidirectional convergence of Islamic finance with the mainstream in practice is directing its educational approach and structure as well. In both cases it has some immediate advantages but has also potential to promote divisive and deviant tendencies in the area of Islamic finance. There already is some evidence on the point and has to be guarded against. 2. There is much diversity in the academic programmes and course structures in the area of Islamic finance within and between public institutions. Some degree of standardization with flexibility margins is desirable, feasible as well. Establishment of layered mutual consultation bodies and sharing of information may help. 3. Creation of research environment, foundational infrastructures based on positive filtering approach, sharing of knowledge and experience, cooperative teaching and ample funding may help build the critical mass to speed up research and build skills in the area of education. 4. Since the total number of students seeking doctoral degrees is not very large, their admission may be restricted to selected institutions where faculty and facilities could be strengthened to promote excellence. This will also allow pooling of teachers coupled with stricter screening of the students. The final product could thus be improved at reduced cost. 5. Academic administration must in general synchronize with academic hierarchy. Contribution to knowledge, research and supervision ought to be recognize and appropriately rewarded strictly on merit. 6. There should be arrangement for preparing reading material integrating mainstream positions and Islamic requirements. Classificatory approach that has mostly been followed so far has to go. Teachers should invariably be associated, rather lead such projects. The effort would produce Shari’ah literate economists. Advisory boards are today exclusively loaded with Shari’ah scholars who are often poor economists. Having both fuqha and economists on the boards would improve compliance. . This could have helped to avoid the controversy and confusion as is found today in the case of Sukuk markets.
    Keywords: Education; Islamic finance; Convergence consequences; Supervision; Curricula structures; Course designs; Private sector role; Critical mass; Western dominance
    JEL: I22
    Date: 2008
  10. By: Thomas Gries (University of Paderborn); Stefan Jungblut (University of Paderborn); Tim Krieger (University of Paderborn); Henning Meier (University of Paderborn)
    Abstract: As societies age, pension reforms become a central issue. One proposition is to extend worklife. However, due to the endogenous depreciation of human capital in many countries the effective retirement age is even below the present statutory retirement age. We analyze this effect in a putty-putty human capital vintage model where the economic retirement age is endogenous. While a higher rate of technical progress will shorten working life, effects of international competition and outsourcing are determined by the terms of trade. As education is expected to solve the problem of too rapidly depreciating human capital we introduce a two stage education system with initial schooling and lifelong learning. However, not even lifelong learning is able to align the economic with the statutory retirement.
    Keywords: lifelong learning, retirement, unemployment, education system
    JEL: J26 O33 J64
    Date: 2008–05
  11. By: Manasan, Rosario G.; Cuenca, Janet S.; Villanueva, Eden C.
    Abstract: Government education spending is expected to improve the well-being of beneficiaries and enhance their capability to earn income in the future. In this sense, directing education expenditures to the poor holds a promise for breaking the intergenerational transmission of poverty. Given this perspective, the paper addresses the question: to what extent has the poor benefited from government spending on education? In particular, it uses benefit incidence analysis to evaluate whether expenditures on education had redistributive impact.
    Keywords: targeting, education, poverty reduction, benefit incidence analysis, Gini coefficient, concentration coefficient, concentration curve
    Date: 2008
  12. By: Mishra, SK
    Abstract: Quality of higher education is a multi-dimensional concept. It lies in effectiveness of transmitting knowledge and skill; the authenticity, content, coverage and depth of information; availability of reading/teaching materials; help in removing obstacles to learning; applicability of knowledge in solving the real life problems; fruitfulness of knowledge in personal and social domains; convergence of content and variety of knowledge over space (countries and regions) and different sections of the people; cost-effectiveness and administrative efficiency. Information technology has progressed very fast in the last three decades; it has produced equipments at affordable cost and it has now made their wider application feasible. This technology has made search, gathering, dissemination, storing, retrieval, transmission and reception of knowledge easier, cheaper and faster. Side by side, a vast virtual library vying with the library in prints has emerged and continues growing rapidly. One may hold that the e-libraries are the libraries of tomorrow when the libraries in prints will be the antiques or the archival objects of the past. This paper discusses in details how information technology can be applied to enhance the quality of higher education at affordable cost. It also discusses the major obstacles to optimal utilization of information technology and measures to remove them.
    Keywords: Information Technology; Quality in Higher Education; e-library; e-book; e-journal
    JEL: A23 A20 I23
    Date: 2008–05–11
  13. By: Andrade, Eduardo C.; Castro, Luciano I.
    Date: 2007–10
  14. By: Jon H. Fiva and Lars J. Kirkebøen (Statistics Norway)
    Abstract: This paper analyzes housing market reactions to the release of previously unpublished information on school quality. Using the sharp discontinuity in the information environment allows us to study price changes within school catchment areas, thus controlling for neighborhood unobservables. We find a substantial housing market reaction to publication of school quality indicators, suggesting that households care about school quality, and may be willing to pay for better schools. The publication effect is robust to a number of sensitivity checks, but does not seem to be permanent as prices revert to prepublication levels after two to three months. We discuss this reversion in relation to the literature on behavioral finance and the concept of limited attention.
    Keywords: valuation of school quality; hedonic methods; price reversion
    JEL: I21 I28 R21 R23
    Date: 2008–05
  15. By: Andrea Frazzini; Christopher Malloy; Lauren Cohen
    Abstract: We study the impact of social networks on agents’ ability to gather superior information about firms. Exploiting novel data on the educational backgrounds of sell side equity analysts and senior officers of firms, we test the hypothesis that analysts’ school ties to senior officers impart comparative information advantages in the production of analyst research. We find evidence that analysts outperform on their stock recommendations when they have an educational link to the company. A simple portfolio strategy of going long the buy recommendations with school ties and going short buy recommendations without ties earns returns of 5.40% per year. We test whether Regulation FD, targeted at impeding selective disclosure, constrained the use of direct access to senior management. We find a large effect: pre-Reg FD the return premium from school ties was 8.16% per year, while post-Reg FD the return premium is nearly zero and insignificant. In contrast, in an environment that did not change selective disclosure regulation (the UK), the analyst school-tie premium has remained large and significant over the entire sample period.
    JEL: G10 G11 G14
    Date: 2008–05
  16. By: Jonathan Guryan; Erik Hurst; Melissa Schettini Kearney
    Abstract: Parents invest both their material resources and their time into raising their children. Time investment in children is thought to be critical to the development of "quality" children who will become productive adults. This paper has three goals related to the examination of parental time allocated to the care of their children. First, using data from the recent American Time Use Surveys (ATUS), we highlight what we think are the most interesting, and perhaps surprising, cross sectional patterns in time spent with children by parents within the United States. Second, we interpret our results in a Beckerian framework of time allocation with a view toward establishing whether parental childcare appears to be more akin to leisure or home production. Third, we examine data from a sample of 14 countries to establish whether the patterns we observe in the United States hold across countries and within other countries. We show that both within countries and across countries there is a strong positive relationship between parental education, or earnings, and time spent with children. We then show that time spent with children does not follow patterns typical of leisure or home production, suggesting an important difference. We speculate that one reason for this positive education gradient relates to the investment aspect of time spent with children.
    JEL: J13 J22
    Date: 2008–05
  17. By: Hernán Jaramillo Salazar; Carolina Lopera Oquendo; Carolina Albán Conto
    Abstract: Este documento presenta una revisión de las principales aproximaciones teóricas sobre recursos humanos en ciencia y tecnología y la modelación empírica de las carreras académicas y científicas utilizando los CVs como fuente de información principal. Adicionalmente, muestra los resultados de varios estudios realizados en Colombia basados en la teoría del capital conocimiento. Estos estudios han permitido establecer una línea de investigación sobre la evaluación del comportamiento de los recursos humanos, el tránsito hacia comunidades científicas y el estudio de las carreras académicas de los investigadores. Adicionalmente, muestran que la información contenida en la Plataforma ScienTI (Grup-Lac y Cv-Lac) permite establecer de manera concreta las capacidades científicas y tecnológicas del país. *********************************************************************************************************** This document is a review of major theoretical approaches on Human Resources in S&T and empirical modeling career academic use CVs as the main source of information. Furthermore, it shows the results of several studies in Colombia based on knowledge capital theory. These studies have established a framework about performance assessment of human resources, scientific communities, and academic careers of researchers. In addition, show that the information in the ScienTI database allow to set scientific and technological capabilities of the country.
    Date: 2008–04–29
  18. By: Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I); Stephane Luchini (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579); Robert-Vincent Joule (LPS - Laboratoire de Psychologie Sociale - Ecole des Hautes Etudes en Sciences Sociales); Jason Shogren (Departement Economy and Finance, University of Wyoming - University of Wyoming)
    Abstract: Do French Students really bid sincerely in real and hypothetical incentive compatible auctions? Recent evidence suggests they do, which goes counter to most observed bidding behavior in the<br />United States, and supports the idea that cultural differences may explain bidding behavior more than economic circumstances. Herein we run a robustness check by exploring bidding behavior in classic Vickrey auction for real and hypothetical values in the two largest cities (Paris and Lyon). Two striking results emerge–(1) French students bid sincerely; and (2) no hypothetical bias exists.
    Keywords: Auctions; Demand revelation; Experimental valuation; Hypothetical bias
    Date: 2008–05–06

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