nep-edu New Economics Papers
on Education
Issue of 2009‒01‒17
twenty-one papers chosen by
Joao Carlos Correia Leitao
Technical University of Lisbon

  1. Public Sector decentralization and school performance. International evidence By Torberg Falch; Justina AV Fischer
  2. Does household expenditure on education in India depend upon the returns to education? By Uma Kambhampati
  3. Public School Choice and Integration: Evidence from Durham, North Carolina By Robert Bifulco; Helen F. Ladd; Stephen Ross
  4. Identity and educational choice: a behavioral approach By Yuemei JI
  5. Immigration and Students' Achievement in Spain By Natalia Zinovyeva; Florentino Felgueroso; Pablo Vazquez Vega
  6. Education in Eritrea: Developmental Challenges By Rena, Ravinder
  7. EARNINGS FUNCTIONS AND RATES OF RETURN By James J. Heckman; Lance J. Lochner; Petra E. Todd
  8. Educational Achievement and Ethnicity in Compulsory Schooling By Christian Dustmann; Stephen Machin; Uta Schönberg
  9. Schools, Skills, and Synapses By James J. Heckman
  10. University ranking according to occupational outcome By Francesca De Battisti; Giovanna Nicolini; Silvia Salini
  11. Peer Effects and Social Networks in Education By Antoni Calvó-Armengol; Eleonora Patacchini; Yves Zenou
  12. Public Spending on Education in Latin America: Does it pay? By Pablo Zoido
  13. Supporting Measures for Research & Development as a Stimulus for Technology Transfer and Academic Entrepreneurship in Estonia By Indrek Jakobson; Valter Ritso
  15. Comparing the Early Research Performance of PhD Graduates in Labor Economics in Europe and the USA By Ana Rute Cardoso; Paulo Guimarães; Klaus F. Zimmermann
  16. Measures of Science & Technology in Ecuador By Massón-Guerra, José Luis
  17. Do Better Schools Lead to More Growth? Cognitive Skills, Economic Outcomes, and Causation By Eric A. Hanushek; Ludger Woessmann
  18. Wages and Human Capital in the U.S. Financial Industry: 1909-2006 By Thomas Philippon; Ariell Reshef
  19. Taking the Easy Way Out: How the GED Testing Program Induces Students to Drop Out By James J. Heckman; Paul A. LaFontaine; Pedro L. Rodriguez
  20. Highly-Educated Immigrants and Native Occupational Choice By Giovanni Peri; Chad Sparber
  21. An educated guess: gender pay gaps in academia By Marina Della Giusta; Alessandra Faggian

  1. By: Torberg Falch; Justina AV Fischer
    Abstract: Using a panel of international student test scores, 1980 – 2000, panel fixed effects estimates suggest that government spending decentralization is conducive to student performance. The effect does not appear to be mediated through levels of, or decentralization in, educational spending.
    Keywords: Fiscal decentralization, Student achievement, federalism, PISA, TIMSS, education, school quality
    Date: 2008
  2. By: Uma Kambhampati (Department of Economics, University of Reading)
    Abstract: This paper analyses whether the amount households spend on education depends upon the returns to education prevalent in the region in which they live. To this end, we estimated rates of return to education separately for boys and girls in 33 states and UTs in India. These rates of return were then included in our education expenditure model. Our results clearly indicated that the rate of return to education was highly significant in increasing the amount spent on education by the household both for boys and girls. However, we find that the impact of this variable is much larger at secondary level and for girls.
    Keywords: Education, Returns to education, India, household expenditure.
    JEL: I21 I22 R22
    Date: 2008
  3. By: Robert Bifulco (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020); Helen F. Ladd; Stephen Ross
    Abstract: Using evidence from Durham, North Carolina, we examine the impact of school choice programs on racial and class-based segregation across schools. Theoretical considerations suggest that how choice programs affect segregation will depend not only on the family preferences emphasized inthe sociology literature but also on the linkages between student composition, school quality and student achievement emphasized in the economics literature. Reasonable assumptions about the distribution of preferences over race, class, and school characteristics suggest that the segregating choices of students from advantaged backgrounds are likely to outweigh any integrating choices by disadvantaged students. The results of our empirical analysis are consistent with these theoretical considerations. Using information on the actual schools students attend and on the schools in their assigned attendance zones, we find that schools in Durham are more segregated by race and class as a result of school choice programs than they would be if all students attended their geographically assigned schools. In addition, we find that the effects of choice on segregation by class are larger than the ffects on segregation by race.
    Keywords: Racial segregation, School choice
    JEL: H31 I20
    Date: 2008–09
  4. By: Yuemei JI
    Abstract: It is puzzling that socioeconomic background greatly affects educational choice. Distinguished from the explanations based on expected utility theory, this paper attempts to explore the psychological mechanisms of generating educational identity1 and schooling choice. It offers a self-signaling model where (1) it incorporates self-esteem concerns into the agent’s payoff function, (2) the investment in schooling not only signals her cognitive ability but also brings the agent into cognitive dissonance and reduction when the perceptions of ability are time-dependent. Using this model, I show a more discriminating analysis of educational choice which combines multi-dimensional factors including socioeconomic background, cognitive and non-cognitive abilities. I identify the conditions under which the high ability agent fails to invest in education. The quality of school and the preschooling are key variables. The model suggests that public policy can help poor children by improving both the early and later education quality at school.
    Keywords: identity, educational choice, poverty
    JEL: D81 I30
    Date: 2008–11
  5. By: Natalia Zinovyeva; Florentino Felgueroso; Pablo Vazquez Vega
    Abstract: In this paper we assess the differences between immigrant and native pupils' educational performance in Spain using data from the Programme for International Student Assessment (PISA). We find that immigrant pupils perform substantially worse than native pupils in all domains analyzed by PISA. Around half of this gap can be attributed to the differences in observable parental socio-economic characteristics. Between 4 and 20% of the gap can be explained by schools' fixed effects, which capture mainly the existence of differences in the average parental education of peers across schools. Immigrants tend to perform relatively worse in those areas where segregation is higher. Finally, we observe that immigrants' performance tends to improve the longer they stay in Spain.
    Date: 2008–11
  6. By: Rena, Ravinder
    Abstract: The ongoing national reconstruction process of Eritrea is centered on educational reformation. The government of Eritrea placed educational policy on top priority for national development which demands the emergence of new class of trained youth blended with disciplined minds and skills instead of raw graduation. It had established about eight colleges at tertiary level within a short span of time to build human resource required for the present and future. In line with this, it laid down new policies and curricula suit to the immediate national scenario. This article analyzed the strengths and weaknesses of the educational policies, planning and the infrastructure requirements to meet the intended goal. It explored and analyzed Eritrean educational development and its key challenges. It also provided some useful insights for policy development. The data for the study were mainly collected from the reports of Ministry of Education and other colleges in Eritrea. The outcome of the educational reformation is expected to have a profound effect in the development of the country.
    Keywords: Education; Eritrea; Human capital and Economic development; Economic growth; Gender inequality.
    JEL: A22 I21 I23 I28 I22
    Date: 2008–03
  7. By: James J. Heckman (University of Chicago, University College Dublin, and American Bar Foundation); Lance J. Lochner (University of Western Ontario); Petra E. Todd (University of Pennsylvania)
    Abstract: The internal rate of return to schooling is a fundamental economic parameter that is often used to assess whether expenditure on education should be increased or decreased. This paper considers alternative approaches to estimating marginal internal rates of return for different schooling levels. We implement a general nonparametric approach to estimate marginal internal rates of return that take into account tuition costs, income taxes and nonlinearities in the earnings-schooling-experience relationship. The returns obtained by the more general method differ substantially from Mincer returns in levels and in their evolution over time. They indicate relatively larger returns to graduating from high school than from graduating from college, although both have been increasing over time.
    Date: 2008–12–15
  8. By: Christian Dustmann; Stephen Machin; Uta Schönberg (Centre for Research and Analysis of Migration (CReAM), Department of Economics UCL, CEP LSE and CEPR, IAB)
    Abstract: This paper analyzes the evolution of the attainment gap between white British born and ethnic minority pupils throughout compulsory schooling, from the age of 5 to 16. At the start of school, pupils from most ethnic groups substantially lag behind White British pupils, but these gaps decline for all groups throughout primary and secondary school. Language is the single most important factor why most ethnic minority pupils improve relative to White British pupils. Although poverty explains part of the differences in levels, it cannot explain why ethnic minority pupils gain relative to or even overtake White British pupils. All ethnic minority groups initially attend worse performing schools than White British pupils. However, more than 20 percent of the subsequent relative improvement can be attributed to ethnic minority pupils moving up to better schools relative to White British pupils. Finally, our results suggest the possibility that the relative improvement of ethnic minority pupils may be related to teacher incentives to concentrate attention on particular pupils, caused by the publication of school league tables at the end of secondary school.
    Date: 2008–10
  9. By: James J. Heckman (University of Chicago)
    Abstract: This paper discusses (a) the role of cognitive and noncognitive ability in shaping adult outcomes, (b) the early emergence of differentials in abilities between children of advantaged families and children of disadvantaged families, (c) the role of families in creating these abilities, (d) adverse trends in American families, and (e) the effective- ness of early interventions in offsetting these trends. Practical issues in the design and implementation of early childhood programs are discussed.
    Keywords: productivity, high school dropout, ability gaps, family influence, noncognitive skills, early interventions
    Date: 2008–12–15
  10. By: Francesca De Battisti (Department of Economics, Business and Statistics - University of Milan); Giovanna Nicolini (Department of Economics, Business and Statistics - University of Milan); Silvia Salini (Department of Economics, Business and Statistics - University of Milan)
    Abstract: We suggest that the "occupational outcome" of graduates should be considered as an additional dimension in the ranking of Academic Institutions and their Faculties. We measure the occupational outcome through the ISTAT graduate employment national survey. We make an exercise on Humanities Faculties showing that we can consider one dimension as occupational outcome or we can split up the latter into two dimensions as "cultural capital" and "social class". We show how the ranking of Italian Universities, made by the Censis-La Repubblica, changes when accounting for this new dimension into the three instances we propose.
    Keywords: Education, Employment, Rating,
    Date: 2008–11–13
  11. By: Antoni Calvó-Armengol; Eleonora Patacchini; Yves Zenou (Universitat Autònoma de Barcelona,Università di Roma “La Sapienza”, Stockholm University, IFN, GAINS, and CREAM)
    Abstract: This paper studies whether structural properties of friendship networks affect individual outcomes in education. We first develop a model that shows that, at the Nash equilibrium, the outcome of each individual embedded in a network is proportional to her Katz-Bonacich centrality measure. This measure takes into account both direct and indirect friends of each individual but puts less weight to her distant friends. We then bring the model to the data by using a very detailed dataset of adolescent friendship networks. We show that, after controlling for observable individual characteristics and unobservable network specific factors, the individual’s position in a network (as measured by her Katz-Bonacich centrality) is a key determinant of her level of activity. A standard deviation increase in the Katz- Bonacich centrality increases the pupil school performance by more than 7 percent of one standard deviation.
    Date: 2008–11
  12. By: Pablo Zoido
    Abstract: Education is one of the most important drivers of economic growth. The benefits of education go beyond the academic, contributing to economic objectives such as growth and productivity, as well as to social goals such as health and social cohesion. In a highly competitive, globalised world economy, public spending on education is more important than ever.
    Date: 2008–10
  13. By: Indrek Jakobson (Tallinn School of Economics and Business Administration, Tallinn University of Technology); Valter Ritso (Tallinn School of Economics and Business Administration, Tallinn University of Technology)
    Abstract: The main aim of the article is to emphasise the need for governmental support in the process of building knowledge-based economy. The authors focus on the knowledge creating process in the form on R&D activities and also on entrepreneurial process, mostly in participation with universities. That means an analytical description of the survey provided by the Ministry of Economic Affairs and Communications of Estonia, outlining the major barriers to this process, proposes the main directions for development through business development of innovative and knowledge-based companies and also the survey conducted in Tallinn University of Technology about academic entrepreneurship. The authors are going to analyse companies’ cooperation with universities for better utilisation of their R&D possibilities, entrepreneurial attitude of universities and also to find out possibilities how further activate the stronger cooperation with universities in Estonia for better collaborative research. On the contrary, university as a partner for entrepreneurs is getting the possibilities to enhance the awareness of science-intensive entrepreneurship.
    Keywords: Research and development (R&D), innovation, technology transfer, knowledge transfer, academic entrepreneurship, spin-off, supporting measure
    JEL: L26 I23 O32 O38
    Date: 2008
  14. By: James J. Heckman (University of Chicago, University College Dublin and the American Bar Foundation); Paul A. LaFontaine (American Bar Foundation)
    Date: 2008–12–15
  15. By: Ana Rute Cardoso; Paulo Guimarães; Klaus F. Zimmermann
    Abstract: This paper analyzes the early research performance of PhD graduates in labor economics, addressing the following questions: Are there major productivity differences between graduates from American and European institutions? If so, how relevant is the quality of the training received (i.e. ranking of institution and supervisor) and the research environment in the subsequent job placement institution? The population under study consists of labor economics PhD graduates who received their degree in the years 2000 to 2005 in Europe or the USA. Research productivity is evaluated alternatively as the number of publications or the quality-adjusted number of publications of an individual. When restricting the analysis to the number of publications, results suggest a higher productivity by graduates from European universities than from USA universities, but this difference vanishes when accounting for the quality of the publication. The results also indicate that graduates placed at American institutions, in particular top ones, are likely to publish more quality-adjusted articles than their European counterparts. This may be because, when hired, they already have several good acceptances or because of more focused research efforts and clearer career incentives.
    Keywords: graduate programs, research productivity
    JEL: A23 J44 A11 A14 A10
    Date: 2008
  16. By: Massón-Guerra, José Luis
    Abstract: One of the structural problems in Latin-American has been the lower innovative capacity and lower generation of economically exploitable knowledge. This phenomenon has been produced by the absence of government’s incentives and strategies in order to be competitive inside the Knowledge Based Economy. More concretely, political, institutional and social factors have contributed negatively within this reality. As a consequence, the knowledge generation in this region is insufficient not only to satisfy its necessities but also to be competitive in the global context. At difference, the developing regions have recognized the significance impact of Science and Technology (S&T) and Education in their sustainable growth. In the Latin-American context, this analysis requires robust indicators that help to evidence the causes of this problematic. In this respect, the absence of harmonized politics and common variables that allows studying the evolution of S&T in the Latin-American region is the main limitation for this analysis. Based on that, this report brings an exploratory analysis that allows identifying the critical factors and the possible solutions of this S&T problematic. In parallel, the case of the National Innovation System implanted in Ecuador is presented and evaluated.
    Keywords: Science; Technology; Entrepreneurship; Innovation
    JEL: O32
    Date: 2009–01–04
  17. By: Eric A. Hanushek; Ludger Woessmann
    Abstract: We provide evidence that the robust association between cognitive skills and economic growth reflects a causal effect of cognitive skills and supports the economic benefits of effective school policy. We develop a new common metric that allows tracking student achievement across countries, over time, and along the within-country distribution. Extensive sensitivity analyses of cross-country growth regressions generate remarkably stable results across specifications, time periods, and country samples. In addressing causality, we find, first, significant growth effects of cognitive skills when instrumented by institutional features of school systems. Second, home-country cognitive-skill levels strongly affect the earnings of immigrants on the U.S. labor market in a difference-in-differences model that compares home-educated to U.S.-educated immigrants from the same country of origin. Third, countries that improved their cognitive skills over time experienced relative increases in their growth paths. From a policy perspective, the shares of basic literates and high performers have independent significant effects on growth that are complementary to each other, and the high-performer effect is larger in poorer countries.
    JEL: H4 I2 J3 J61 O1 O4
    Date: 2009–01
  18. By: Thomas Philippon; Ariell Reshef
    Abstract: We use detailed information about wages, education and occupations to shed light on the evolution of the U.S. financial sector over the past century. We uncover a set of new, interrelated stylized facts: financial jobs were relatively skill intensive, complex, and highly paid until the 1930s and after the 1980s, but not in the interim period. We investigate the determinants of this evolution and find that financial deregulation and corporate activities linked to IPOs and credit risk increase the demand for skills in financial jobs. Computers and information technology play a more limited role. Our analysis also shows that wages in finance were excessively high around 1930 and from the mid 1990s until 2006. For the recent period we estimate that rents accounted for 30% to 50% of the wage differential between the financial sector and the rest of the private sector.
    JEL: G2 J2 J24 J3 O3 O32 O33 O51
    Date: 2009–01
  19. By: James J. Heckman (Department of Economics, University of Chicago); Paul A. LaFontaine (American Bar Foundation); Pedro L. Rodriguez (Center for Social Program Evaluation, Irving B. Harris School of Public Policy)
    Date: 2008–12–15
  20. By: Giovanni Peri; Chad Sparber (University of California, Davis and NBER, Colgate University)
    Abstract: Economic debate about the consequences of immigration in the US has largely focused on how influxes of foreign-born labor with little educational attainment have affected similarly-educated native-born workers. Surprisingly few studies, however, analyze the effect of immigration within the market for highly-educated labor. We use O*NET data on job characteristics to assess whether native-born workers with graduate degrees respond to the presence of highly-educated foreign-born workers by choosing new occupations with different skill content. We find that immigrants with graduate degrees specialize in occupations demanding quantitative and analytical skills, whereas their native-born counterparts specialize in occupations requiring interactive and communication skills. Native employees leave occupations with a high proportion of highlyeducated immigrants for occupations with less analytical and more communicative content. For completeness, we also assess whether immigration causes highly-educated natives to lose their jobs or move across state boundaries. We no evidence that the former occurs, but mixed evidence for the latter response.
    Date: 2008–10
  21. By: Marina Della Giusta (Department of Economics, University of Reading); Alessandra Faggian (University of Southampton)
    Date: 2008

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