nep-edu New Economics Papers
on Education
Issue of 2008‒09‒20
twenty-one papers chosen by
Joao Carlos Correia Leitao
Technical University of Lisbon

  1. Is there a Difference Between For-Profit Versus Not-For-Profit Charter Schools? By Cynthia D Hill; David Welsch
  2. Interaction between Research and Education – can industry co-operation improve the link? By Johansson, Maria
  3. Increasing Returns to Education and Progress towards a College Degree By Leslie S Stratton; James N. Wetzel
  4. History of finance research and education in Finland: the first thirty years By Vaihekoski, Mika
  5. What does it Mean Conceptually that Universities Compete? By Deiaco, Enrico; Homén, Magnus; McKelvey, Maureen
  6. The Economics Major and a Liberal Education By Dave Colander; KimMarie McGoldrick
  7. The Professional Development of Graduate Students in Economics By KimMarie McGoldrick; Gail Hoyt; Dave Colander
  8. Getting Pole Position - Pre reform research strategies in the humanities at Swedish universities By Geschwind, Lars; Larsson, Karin
  9. Education and Economic Development in India By Monojit Chatterji
  10. Is Education the Panacea for Economic Deprivation of Muslims? Evidence from Wage Earners in India, 1987-2004 By Sumon Kumar Bhaumik; Manisha Chakrabarty
  11. The Effects of School Quality and Family Functioning on Youth Math Scores: a Canadian Longitudinal Analysis By Pierre Lefebvre; Philip Merrigan; Matthieu Verstraete
  12. Asset Management, Human Capital, and the Market for Risky Assets By Isaac Ehrlich; William A. Hamlen Jr.; Yong Yin
  13. Public Infrastructure, Location of Private Schools and Quality of Schooling in an Emerging Economy By Sarmistha Pal
  14. Reported Progress under the Student Right-to-Know Act: How Reliable is It? By Leslie S Stratton; James N. Wetzel
  15. The impact of human capital on firm-level input use: Argentine agriculture By Marcos Gallacher
  16. Gender Differences in Market Competitiveness in a Real Workplace: Evidence from Performance-based Pay Tournaments among Teachers By Victor Lavy
  17. Endowments, Coercion, and the Historical Containment of Education By Gustavo J Bobonis
  18. Does Finland Suffer from Brain Drain? By Edvard Johansson
  19. WP n. 15 - Measuring Well-Being differences across EU Countries. A Multidimensional Analysis of Income, Housing, Health, and Education By Elisabetta Croci Angelini; Alessandra Michelangeli
  20. Culture and Human Capital Investments: Evidence of an Unconditional Cash Transfer Program in Bolivia By Yanez-Pagans, Monica
  21. What Economics Students Think of the Economics Major By Steven Jones; Eric Hoest; Richie Fuld; Mahesh Dahal; Dave Colander

  1. By: Cynthia D Hill (Idaho State University); David Welsch (Department of Economics, University of Wisconsin - Whitewater)
    Abstract: The role of for-profit educational organizations in the predominantly public and not-for-profit K-12 U.S. schooling system is being fiercely debated across our nation. Little empirical research is available to help policy makers develop informed decisions regarding the educational value that for-profit schools provide to our students. This paper fills in part, for the first time in detail, this void. This paper uses a four year panel of charter schools from the state of Michigan and a random effects model that controls for student and district characteristics. Results indicate that for-profit charter schools have lower math test scores than not-for-profit charter schools. Interestingly, this result holds even when expenditure per pupil is controlled for. The analysis developed in this paper takes the debate one step further as well, and examines the role that the size of for-profit firms plays in the associated outcomes.
    Keywords: Profit, For-Profit, Not-For-Profit, Nonprofit, Charter Schools, Random Effects, Education
    JEL: H52 L30 H75 I21
    Date: 2008–05
  2. By: Johansson, Maria (SISTER)
    Abstract: This study attempts to provide a new perspective on current shifts in knowledge production through analysing the relationship between research and education. The study, based on interviews and questionnaires, focus on the interaction within applied research centres with a close industry co-operation. The results suggests that the interaction between research and education benefits from a collaborative environment since: researchers hold positive attitudes toward integrating research, education and collaboration, and students are given the opportunity to work within applied research projects. The findings are discussed in terms of researchers’ ability to handle their scholarly tasks of research, teaching, and collaboration, and the importance for acknowledging research collaborations from both research and teaching perspectives.
    Keywords: Research and teaching links; collaboration; applied research; undergraduate education
    JEL: I21 I23
    Date: 2008–09–09
  3. By: Leslie S Stratton (Department of Economics, VCU School of Business); James N. Wetzel (Department of Economics, VCU School of Business)
    Abstract: Returns to college have increased, but graduation rates have changed relatively little. Modifying a human capital model of college enrollment to endogenize time-to-graduation, we predict that higher returns to education will both speed graduation and increase enrollment. Some of those new entrants may, however, take longer to graduate. Using the 1989 and 1995 Beginning Postsecondary Studies, we employ a multinomial logit to model the association between individual and family characteristics, and five-year college outcomes: graduation, continued enrollment, and non-enrollment. Between cohort differences arise either because the characteristics of those entering college are different or because the relations between characteristics and outcomes have changed. We utilize a Oaxaca-Blinder style decomposition to distinguish between these two alternatives, attributing differences in characteristics to newly attracted students and differences in the relations between characteristics and outcomes to historically attracted students behaving differently. It is changes in behavior that explain the increased progress we observe.
    Keywords: Higher Education, Graduation Rates, Persistence
    JEL: I21
    Date: 2008–08
  4. By: Vaihekoski, Mika (Turku School of Economics and Lappeenranta University of Technology)
    Abstract: This paper reviews the first thirty years of finance research and education in Finland, starting with publication of the first dissertation in finance in 1977. That was also the year when the first department of finance was established in Finland – among the first in the Nordic countries. This review shows how Finnish financial education and research developed from a humble beginning to a level that brought international acclaim. This can be largely attributed to a number of talented and hard-working individuals but also to the decision for collaboration among the Finnish universities, as a means to overcome some of the problems of a small country.
    Keywords: financial education; research; graduate school; Finland; history; professors; dissertation
    JEL: A23 B25 G00
    Date: 2008–09–08
  5. By: Deiaco, Enrico (SISTER); Homén, Magnus (Chalmers Institute of Technology); McKelvey, Maureen (Chalmers Institute of Technology)
    Abstract: This article addresses the issue of how and why European universities are learning to compete, in a situation where the national institutional context and sectoral conditions are undergoing transformation. European universities – from top leaders, faculties, research groups and individual employees – are increasingly forced to explain to many stakeholders about how, whether, and why their scientific knowledge and educational programmes are relevant to society or not. For example, if universities are not contributing to public and private goods, why should society continue providing resources? Why should students pay for education, if the individual returns are too low? Why should companies and private foundations pay for research, if the results are not directly relevant to their goals? How can the efficiency and productivity of the university be improved – and which metrics can be used to demonstrate that those goals have been met? What are the dilemmas and trade-offs that this new competitive regime imposes on the functioning of universities and of society? These are the types of questions currently raised within universities in Continental Europe and Nordic countries, and ones that university leaders, faculty and staff will have to answer. Or else, they should raise new types of questions and perspectives about the role of the university in society.universities now face clear demands of producing immediately usefulness knowledge to students, businesses and society (enhanced amongst other by the Bologna process). The pressures on the university to quickly respond to societal and industrial demands have been more forcefully articulated in recent years. If these organizations wish to retain the traditional values of scholarship, they will need to do so, in parallel with understanding – and changing – their selection environment in the future. We focus upon the competition aspect from a Schumpeterian view, in order to draw out the logical conclusions but we do not focus upon whether those outcomes are desirable or negative. We choose this focus because we know that universities play major roles in the knowledge society, and current debates within the EU indicate that we will see additional major changes in the national institutional context and global markets. The article turns to more abstract questions, such as whether competition exists amongst universities and if so, what are the major trends and future outcomes of this shift from a social institution to a knowledge business. Thus, do universities really compete? And if so, how do they compete? And over what?
    Keywords: universities; competition
    JEL: I21 I23
    Date: 2008–09–09
  6. By: Dave Colander; KimMarie McGoldrick
    Date: 2008–12
  7. By: KimMarie McGoldrick; Gail Hoyt; Dave Colander
    Abstract: This paper provides insight into the skill development activities of graduate students at U.S. institutions providing graduate education in economics. It documents the extent of student participation in and preparation for research and teaching activities while in graduate school. Over fifty percent of students are involved in teaching related activities including grading, leading recitation sections, and teaching their own sections with and without guidance. Most were generally satisfied with their preparation. About fifty-five percent of graduate students attend economic conferences, twenty percent present papers, twenty-two percent submit papers and ten percent have published. Important differences by assistantship assignments, institutional rank, and gender in such activities are highlighted. Findings suggest that programs could do more to prepare students for participation in professional activities post graduation.
    Date: 2008–11
  8. By: Geschwind, Lars (SISTER); Larsson, Karin (SISTER)
    Abstract: Across Europe new forms of research funding and management arrangements are established. European higher education institutions (HEIs) are increasingly facing global competition and they are responsive to many stakeholders. As a consequence of more deregulated HE systems, performance based funding, strategic management and more extensive evaluation and follow up-systems have replaced the former state directed systems. Currently, also the Swedish HE sector is in a time of change. A number of state inquiries have reviewed the Swedish HE research landscape, including the resource allocation system and the academic career system. The implications of these inquiries have the potential to restructure the entire sector. Some of the issues will be presented in a government bill this fall, while other reforms are further ahead. The phase we study could thus be described as a pre-reform or policy formation phase. This paper explores research strategies in the Humanities at a selection of Swedish HEIs. The aim of the paper can be articulated in one straightforward question: in a period of pre-reform, which strategies are used by ten Swedish HEIs to increase research quality in the Humanities? The methodology used is primarily qualitative, including email enquiry, interviews and documentary studies on ten Swedish Universities which are the main producers of Humanities research in Sweden.
    Keywords: higher education institutions; university strategy
    JEL: I21 I23
    Date: 2008–09–09
  9. By: Monojit Chatterji
    Abstract: This brief survey examines the returns to education in India , and then examines the role of education on both economic growth and economic development with particular reference to India. Throughout, the objective is to draw out the implications of the empirical results for education policy. The results suggest that female education is of particular importance in India. They also suggest that perhaps because of the externalities it generates, primary education is more important than might be deduced from its relatively low private rate of return.
    Keywords: education, economic growth, economic development
    JEL: I2 O53
    Date: 2008–02
  10. By: Sumon Kumar Bhaumik; Manisha Chakrabarty
    Abstract: Few researchers have examined the nature and determinants of earnings differentials among religious groups, and none has been undertaken in the context of conflict-prone multi-religious societies likethe one in India. We address this lacuna in the literature by examining the differences in the average (log) earnings of Hindu and Muslim wage earners in India, during the 1987-2005 period. Our results indicate that education differences between Hindu and Muslim wage earners, especially differences in the proportion of wage earners with tertiary education, are largely responsible for the differences in the average (log) earnings of the two religious groups across the years. By contrast, differences in the returns to education do not explain the aforementioned difference in average (log) earnings. Citing other evidence about persistence of educational achievements across generations, however, we argue that attempts to narrow this gap using quotas for Muslim households at educational institutions might be counterproductive from the point of view of conflict avoidance.
    Date: 2008–02
  11. By: Pierre Lefebvre; Philip Merrigan; Matthieu Verstraete
    Abstract: This paper tries to disentangle the relative importance of family and school inputs on a child's cognitive achievement as measured by her percentile score on a mathematics test. We replicate a study by Todd and Wolpin (2007) in the United States with Canadian data. In contrast to their work that uses state-level indicators of school quality, we estimate our model with data from Statistics Canada's National Longitudinal Survey of Children and Youth (NLSCY) which provides micro-level information on the family and school history of the child. The sample used for the analysis is based on the 7- to 15-year-old longitudinal children who have completed at least two consecutive math tests. As in Todd and Wolpin, we conclude that cognitive outcomes are determined by current and past family inputs. Contrary to them, who find no impact of school inputs, we find that the quality of schools has a positive impact on achievement in mathematics.
    Keywords: Math scores, human capital, child development, school and family inputs, panel data
    JEL: I21 J13 C23
    Date: 2008
  12. By: Isaac Ehrlich; William A. Hamlen Jr.; Yong Yin
    Abstract: Risky-asset prices are conventionally modeled as "fully (information-) revealing". Much less work has been done on how prices get to reveal information. Following the "noisy-prices", rational-expectations approach, our answer focuses on the micro-foundations of information acquisition and the role of human capital in asset, or risk, management. We derive testable propositions on how education and other determinants of asset management affect its intensity, risky-asset demand, and portfolio returns. We derive related insights concerning determinants of the level and volatility of asset prices and equity premiums. Using micro-level data on portfolio choices, we find that education raises both the portfolio share of risky assets and overall portfolio returns, while a measure of the opportunity cost of asset management has the opposite effects. Our results indicate a non-trivial return to education in generating non-wage income. They suggest that educational attainments directly affect the distribution of income as well as earnings.
    JEL: G00 G11 G12 I0 I20 J24
    Date: 2008–09
  13. By: Sarmistha Pal
    Abstract: The present paper argues that local public infrastructure exerts a significant and positive effect on the presence of private school as well as the quality of schooling in the Indian villages. Given historical distribution of land and ethnic composition, villages with more unequal distribution of land are more likely to have better access to public infrastructure (for given level of ethnic fractionalization), which in turn enhances the likelihood of having a private school in the village. Results using PROBE survey of household-, school- and village-level data from five north Indian states provide some support to this central hypothesis. There is also evidence that the quality of overall schooling is generally better in villages with a private school; rise of private schools however fails to affect the quality of local state schools.
    Date: 2008–05
  14. By: Leslie S Stratton (Department of Economics, VCU School of Business); James N. Wetzel (Department of Economics, VCU School of Business)
    Abstract: The Student Right-to-Know Act requires colleges to provide institution-specific information on graduation rates for students initially enrolling full-time in the fall term. Not all students enroll in that fashion, especially at two-year institutions. We use data on degree-seeking students from the 1996/2001 Beginning Post-Secondary Survey to identify students for whom statistics are and are not reportable under the Act and to track their progress. Results indicate the published progress rates are substantially higher than the progress rates for the non-reportable populations, whether students enter a two-year or a four-year institution. While progress rates for the two samples are significantly correlated within four-year institutions, they are not within two-year institutions. For those beginning at two-year institutions, the progress rates reported under the Student Right-to-Know Act are indicative of neither their absolute nor their relative (cross-institution) probability of success. Policy makers and prospective students will not make efficient decisions without better information.
    Keywords: Efficiency, Resource Allocation, Graduation
    JEL: I28
    Date: 2008–05
  15. By: Marcos Gallacher
    Abstract: This paper attempts to understand the linkages between human capital and input choice in agricultural firms. The hypothesis to be tested is that better educated managers choose different input combinations than managers with a lower educational level. In particular, the hypothesis is that the ratio between non-land and land input increases as education increases. Non-land inputs include fertilizers, machinery services, herbicides, animal stocks and others. An increase in the non-land/land input ratio results in increased output (and costs) per unit of land. Given the fixity of land at the aggregate level, the non-land/land input ratio is an important determinant of total sector output. Este trabajo tiene como objetivo entender los vínculos que existen entre capital humano y uso de insumos en empresas agropecuarias. La hipótesis a ser sometida a prueba es que los productores con mayor nivel de educación eligen combinaciones de insumos distintas que las elegidas por aquellos que cuentan con un nivel de educación mas bajo. En particular, que el ratio entre insumos de capital y el insumo tierra aumenta a medida que la educación de los productores aumenta. Los insumos de capital incluyen fertilizantes, servicios de maquinaria, herbicidas, capital biológico (animales) y otros. Un aumento en el ratio entre insumos de capital por unidad de recurso tierra resulta en mayor producto (y costos) por unidad de tierra. Dado que a nivel agregado la tierra es un insumo fijo, el ratio entre capital y tierra es un importante determinante de la producción total lograda. El nivel educativo de los productores, al impactar sobre la intensidad de uso de la tierra, resulta entonces un importante determinante del nivel total de producción logrado.
    Keywords: human capital, agriculture, input use
    JEL: Q12 D24
    Date: 2008–09
  16. By: Victor Lavy
    Abstract: Recent lab and field experiments suggest that women are less effective than men in a competitive environment. In this paper I examine how individual performance in a real work place is affected by a competitive environment and by its gender mix. The competition is among math, English and Language teachers who participated in a rank order tournament that rewarded teachers with large cash bonuses based on the test performance of their classes. The evidence suggest that the average ranking, winning rate and awarded prize did not differ by gender nor between teachers in competition groups with only female teachers or with both genders. I also find that the direct impact of the bonus program on students' outcomes did not vary by male and female teachers or by the type of competitive environment in terms of gender mix of the participants. As for mechanisms that can explain these results, I found no differences by either gender or by the gender mix of the competition group in teachers' awareness and familiarity with the program and its rules, and in effort and teaching methods. Women though were more pessimistic about the effectiveness of teachers' performance pay and more realistic than men about their likelihood of winning bonuses.
    JEL: I2 I21 J00 J16 J18 J33
    Date: 2008–09
  17. By: Gustavo J Bobonis
    Abstract: Distinguishing the role of coercive labor and political institutions from the effects of economic inequality levels and populations’ ethno-linguistic compositions in explaining the diverging patterns of development across the Americas has remained a challenging task. This paper examines whether the incentives for elite groups to enforce coercive labor and political institutions, holding other factors constant, inhibited economic development by restricting the provision of public schooling. Using 19th-century micro data from municipalities in Puerto Rico, and exploiting variation in the suitability of coffee cultivation across regions and the timing of the nineteenth century coffee boom, we find that coffee-region local governments allocated more public resources to enforce coercive labor measures and repress revolutionary movements, as documented by greater expenditures targeted towards the enforcement of coercive contracts and the size of military and government-backed paramilitary forces. These local governments also allocated fewer resources towards the provision of primary schooling - a decline of 40 percent in the provision of public primary schools and a decline in literacy rates of 25 percent. These findings are consistent with models of factor price manipulation and political repression under elite-controlled non-democratic regimes, in which the returns to labor are depressed as a result of the extraction of rents from peasants’ wages and literacy-based voting rights are restricted through limited access to schooling.
    Keywords: labor coercion; political institutions; geography; schooling
    JEL: O11 N46
    Date: 2008–09–12
  18. By: Edvard Johansson
    Abstract: ABSTRACT : This paper examines the trends in immigration to and emigration from Finland during the period 1987-2006. The focus is on the “human capital content” of the migration flows, the key question being : Is Finland losing out in the international competition for highly educated individuals? International comparisons presented by the OECD give the impression that Finland perform very weakly in the global competition for talent, as the share of highly-skilled immigrants is very low. However, these comparisons are distorted by the lack of information with regard to the level of education of immigrants into Finland. It would be desirable that the Central Statistical Office could provide better information on this issue. The results of this paper indicate that Finland’s emigrants are indeed better educated than its immigrants, and that brain-drain exists to a certain degree. However, the magnitude of the brain-drain phenomenon is not very large, and there is no statistical evidence of the well-educated to emigrate would have increased over time. Although Finland’s immigrants are more poorly educated than the Finnish population at large, they are apparently better educated than immigrants to, for instance, Sweden or Denmark, owing to the disproportionately large share of immigrants from Estonia and Russia to Finland. Nevertheless, the labour market performance of Finnish immigrants is as bad as for immigrants in most Western European countries, i.e. their unemployment rate is about twice as high as that of the native population. This amounts to a serious failure of assimilation policies.
    Date: 2008–09–10
  19. By: Elisabetta Croci Angelini (Università di Macerata); Alessandra Michelangeli (University of Milan-Bicocca and Econpubblica-Bocconi University)
    Abstract: <p align="justify">This paper investigates the evolution of the inequality in well-being across di erent EU countries between 1994 and 2001 by means of a multidimensional approach focusing on income, housing, education and health. We first analyse the four dimensions each by each through an univariate Atkinson-Kolm-Sen index. Then the distributions of each attribute are aggregated into an index which takes into account the possible correlation between dimensions. Our empirical results summarize the trends in inequality for the four indicators of well-being considered both separately and jointly, over time and across countries. Since our multidimensional index depends on the values assigned to the parameters, we test the sensitivity of the trend in well-being inequality for di erent normative choices.</p>
    Keywords: Inequality indicators,European Union,Well-being,Multidimensionality
    JEL: O1 O11
    Date: 2008–06
  20. By: Yanez-Pagans, Monica (University of Illinois at Urbana-Champaign)
    Abstract: This paper uses a policy quasi-experiment created by the introduction of an old-age unconditional cash transfer program in Bolivia to study the intra-household income allocation process towards children's educational expenditure by ethnicity and gender of the recipient. Taking advantage of a sharp discontinuity created by the program assignment mechanism, I investigate the heterogeneity in the patterns of allocation within indigenous, multiethnic, and non-indigenous families, conditional on having one elder and one school-age child living in the household. I find that cultural factors (proxied by ethnicity) count in the decision making process of human capital investments. In particular, the allocation of resources within indigenous families follows rules closely related to patriarchal family structures (in which women have limited decision-making power) and is consistent with unitary, dictatorial, and common preferences theoretical household models. Conversely, non-indigenous families follow decision rules more closely related to collective and bargaining behavior models.
    Keywords: Bolivia, culture, Bolivida, educational expenditure
    JEL: H55 O15 I12 D12
    Date: 2008–09
  21. By: Steven Jones; Eric Hoest; Richie Fuld; Mahesh Dahal; Dave Colander
    Date: 2008–10

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