nep-edu New Economics Papers
on Education
Issue of 2009‒04‒13
28 papers chosen by
Joao Carlos Correia Leitao
Technical University of Lisbon

  1. Faith Primary Schools: Better Schools or Better Pupils? By Gibbons, Steve; Silva, Olmo
  2. Are easy grading practices induced by low demand? Evidence from Italy By Maria , De Paola
  3. School Tracking and Development of Cognitive Skills By Pekkarinen, Tuomas; Uusitalo, Roope; Kerr, Sari
  4. The Impact of Child Labor and School Quality on Academic Achievement in Brazil By Bezerra, Márcio Eduardo G.; Kassouf, Ana Lucia; Arends-Kuenning, Mary P.
  5. The Impact of Education on the Subjective Discount Rate in Ugandan Villages By Bauer, Michal; Chytilová, Julie
  6. Estimating the Social Value of Higher Education: Willingness to Pay for Community and Technical Colleges By Blomquist, Glenn C.; Coomes, Paul A.; Jepsen, Christopher; Koford, Brandon C.; Troske, Kenneth
  7. The Internationalization of Science and its Influence on Academic Entrepreneurship By Stefan Krabel; Donald S. Siegel; Viktor Slavtchev
  8. Does increasing parents' schooling raise the schooling of the next generation? Evidence based on conditional second moments By Francis Vella; Lídia Farré; Roger Klein
  9. Charter Schools in New York City: Who Enrolls and How They Affect Their Students' Achievement By Caroline M. Hoxby; Sonali Murarka
  10. 'The' Market for Higher Education: Does It Really Exist? By Becker, William E.; Round, David K.
  11. The Governance and Performance of Research Universities: Evidence from Europe and the U.S. By Philippe Aghion; Mathias Dewatripont; Caroline M. Hoxby; Andreu Mas-Colell; André Sapir
  12. The Impact of Conditional Cash Transfers on Children’s School Achievement: Evidence from Colombia By Sandra García; Jennifer Hill
  13. Does Student Sorting Invalidate Value-Added Models of Teacher Effectiveness? An Extended Analysis of the Rothstein Critique By Cory Koedel; Julian Betts
  14. Education, Corruption and the Natural Resource Curse By Aldave, Iván; García-Peñalosa, Cecilia
  15. The motivations, organisation and outcomes of university-industry interaction in the Netherlands By Bodas Freitas, Isabel Maria; Verspagen, Bart
  16. Menstruation and Education in Nepal By Emily Oster; Rebecca Thornton
  17. Education and selective vouchers By Amedeo Piolatto
  18. Are Lone Mothers Responsive to Policy Changes? The Effects of a Norwegian Workfare Reform on Earnings, Education and Poverty. By Chiara Pronzato; Magne Mogstad
  19. Armed Conflict Exposure, Human Capital Investments and Child Labor: Evidence from Colombia By Catherine Rodríguez; Fabio Sánchez T.
  20. Exploring the Factors Associated with Youths’ Educational Outcomes: The Role of Locus of Control and Parental Socio-Economic Background By Juan Baron
  21. The Effect of Children on the Level of Labor Market Involvement of Married Women: What is the Role of Education? By Troske, Kenneth; Voicu, Alexandru
  22. Employer-provided training and knowledge spillovers: evidence from Italian local labour markets By Croce, Giuseppe; Ghignoni, Emanuela
  23. Education and Growth: A Simple Model with Complicated Dynamics By Theodore Palivos; Dimitrios Varvarigos
  24. Regional Economic Growth And Human Capital: The Role Of Overeducation By Raul Ramos; Jordi Suriñach; Manuel Artís
  25. Factors affecting the schooling performance of secondary school pupils - the cost of high unemployment and imperfect financial markets By Claudia Trentini; Lídia Farré
  26. Paying for Progress: Conditional Grants and the Desegregation of Southern Schools By Elizabeth Cascio; Nora Gordon; Ethan Lewis; Sarah Reber
  27. Income Contingent Student Loans for Thailand: Alternatives Compared By Bruce Chapman; Kiatanantha Lounkaew
  28. Do Students Expect Compensation for Wage Risk? By Schweri, Jürg; Hartog, Joop; Wolter, Stefan

  1. By: Gibbons, Steve (London School of Economics); Silva, Olmo (London School of Economics)
    Abstract: We provide estimates for the effect of attending a Faith school on educational achievement using a census of primary school pupils in England. We argue that there are no credible instruments for Faith school attendance in this context. Instead, we partially control for selection into religious schooling by tracking pupils over time and comparing attainments of students who exhibit different levels of commitment to religious education through their choice of secondary school and residence. Using this approach, we find only a small advantage from Faith primary schooling, worth about 1 percentile on age-11 test scores. Moreover, this is linked to autonomous admissions and governance arrangements, and not to religious character of the schools. We then go on to show that our estimates vary substantially across pupil subgroups that exhibit different levels of sorting on observable characteristics into Faith schooling, and provide bounds on what the 'Faith school effect' would be in the absence of sorting and selection. Pupils with a high degree of observable-sorting into Faith schools have an age-11 test score advantage of up to 2.7 percentiles. On the other hand, pupils showing a very low degree of sorting on observables have zero or negative gains. It appears that most of the apparent advantage of Faith school education in England can be explained by differences between the pupils who attend these schools and those who do not.
    Keywords: faith school, primary schools, pupil achievement
    JEL: I20 J24 Z12
    Date: 2009–03
  2. By: Maria , De Paola
    Abstract: In this paper we investigate whether grades are used by educational institutions as a competition variable to attract and retain students. Using a sample of almost 26,000 students enrolled at an Italian University, we document that grades vary significantly across degrees. After controlling for students’ characteristics, class-size, classmates’ quality and degree fixed effects, it emerges that students obtain better grades and are less likely to drop-out when their degree course experiences an excess of supply. We adopt an instrumental variable strategy to account for endogeneity problems and instrument the excess of supply by using the total number of universities offering each degree course. Our IV estimates confirm that the teaching staff on degree course facing low demand tend to set lower academic standards with the result that their students obtain better grades and have a lower probability of dropping out than they might otherwise.
    Keywords: grades; higher education; grading standards
    JEL: A2
    Date: 2008–04–06
  3. By: Pekkarinen, Tuomas (Helsinki School of Economics); Uusitalo, Roope (VATT, Helsinki); Kerr, Sari (Charles River Associates)
    Abstract: The Finnish comprehensive school reform replaced the old two-track school system with a uniform nine-year comprehensive school and significantly reduced the degree of heterogeneity in the Finnish primary and secondary education. We estimate the effect of this reform on the test scores in the Finnish Army Basic Skills test. The identification strategy relies on a differences-in-differences strategy and exploits the fact that the reform was implemented gradually across the country during a six-year period between 1972 and 1977. We find that the reform had a small positive effect on the verbal test scores but no effect on the mean performance in the arithmetic or logical reasoning tests. Still in all tests the reform improved the scores of students from families where parents had only basic education.
    Keywords: education, school system, tracking, comprehensive school, test scores
    JEL: H52 I21
    Date: 2009–03
  4. By: Bezerra, Márcio Eduardo G. (University of Sao Paulo); Kassouf, Ana Lucia (University of Sao Paulo); Arends-Kuenning, Mary P. (University of Illinois at Urbana-Champaign)
    Abstract: We analyze the impact of child labor on school achievement using Brazilian school achievement test data from the 2003 Sistema Nacional de Avaliação da Educação Básica (SAEB). We control for the endogeneity of child labor using instrumental variable techniques, where the instrumental variable is the average wage for unskilled male labor in the state. Using our preferred OLS estimates, we find that child labor causes a loss in students' school achievement. Children and adolescents who do not work have better school performance than students who work. Up to two hours of work per day do not have a statistically significant effect on school performance, but additional hours decrease student's achievement. Differences in work conditions affect school performance. For high school students in Portuguese, compared to students who have schooling as their only activity, students who work only at home score 4 percent lower on the tests. Those students who only work outside the house are worse off than those who only work within the house, with test scores decreasing by 5 percent. Students who work both inside and outside the house have the lowest test scores of all the working conditions, decreasing by up to 7 percent.
    Keywords: child labor, school achievement, Brazil
    JEL: I21 J13 J22 O15
    Date: 2009–03
  5. By: Bauer, Michal (Charles University, Prague); Chytilová, Julie (Charles University, Prague)
    Abstract: Heterogeneity in time discounting may reinforce the existing barriers to save and invest faced by rural populations in developing countries. We elicit a subjective discount rate for a varied sample of Ugandan villagers. In accordance with other studies, we have found the discount rate to decrease with education. We examine this correlation further by testing the causal effect of education and exploit two different sources of its variation: school frequency across villages and the number of the respondents' school-going years that overlap with the era of the dictator Idi Amin's rule. For men, we find that education has a significant impact on their discount rate, similar in magnitude for both types of instruments and robust to observable characteristics. This finding highlights the importance of education in development.
    Keywords: time discounting, patience, education, economic development, Uganda
    JEL: C93 D91 O12
    Date: 2009–03
  6. By: Blomquist, Glenn C. (University of Kentucky); Coomes, Paul A. (University of Louisville); Jepsen, Christopher (University of Kentucky); Koford, Brandon C. (Valdosta State University); Troske, Kenneth (University of Kentucky)
    Abstract: Much is known about private returns to education in the form of higher earnings. Less is known about social value, over and above the private, market value. Associations between education and socially-desirable outcomes are strong, but disentangling the effect of education from other causal factors is challenging. The purpose of this paper is to estimate the social value of one form of higher education. We elicit willingness to pay for the Kentucky Community and Technical College System directly through a stated-preferences survey and compare our estimate of total social value to our estimates of private value in the form of increased earnings. Our earnings estimates are based on two distinct data sets, one administrative and one from the U.S. Census. The difference between the total social value and the increase in earnings is our measure of the education externality. Our work differs from previous research by eliciting values directly in a way that yields a total value including any external benefits and by focusing on education at the community college level. Our preferred estimate indicates the social value of expanding the system substantially exceeds private value by approximately 50 percent.
    Keywords: social returns, education externalities, contingent valuation, earnings
    JEL: I2 H4 H23
    Date: 2009–03
  7. By: Stefan Krabel (Max Planck Institute of Economics, Jena); Donald S. Siegel (University at Albany, SUNY); Viktor Slavtchev (Max Planck Institute of Economics, Jena)
    Abstract: We conjecture that the mobility of academic scientists increases the propensity of such agents to engage in academic entrepreneurship. Our empirical analysis is based on a survey of researchers at the Max Planck Society in Germany. We find that mobile scientists are more likely to become nascent entrepreneurs. Thus, it appears that citizenship and foreign-education are important determinants of the early stages of academic entrepreneurship.
    Keywords: Academic Entrepreneurship, Human Capital, Scientific Mobility, Knowledge Transfer, Immigrant Entrepreneurship
    JEL: L26 O31
    Date: 2009–04–02
  8. By: Francis Vella (Georgetown University); Lídia Farré (Universidad de Alicante); Roger Klein (Rutgers University)
    Abstract: This paper investigates the degree of intergenerational transmission ofeducation for individuals from the National Longitudinal Survey of Youth1979. Rather than identifying the causal effect of parental education viainstrumental variables we exploit the feature of the transmissionmechanism responsible for its endogeneity. More explicitly, we assume theintergenerational transfer of unobserved ability is invariant to the economicenvironment. This, combined with the heteroskedasticity resulting from theinteraction of unobserved ability with socioeconomic factors, identifies thiscausal effect. We conclude the observed intergenerational educationalcorrelation reflects both a causal parental educational effect and a transferof unobserved ability.
    Keywords: Intergenerational mobility, endogeneity, conditional correlation
    JEL: C31 J62
    Date: 2009–03
  9. By: Caroline M. Hoxby; Sonali Murarka
    Abstract: We analyze all but a few of the 47 charter schools operating in New York City in 2005-06. The schools tend locate in disadvantaged neighborhoods and serve students who are substantially poorer than the average public school student in New York City. The schools also attract black applicants to an unusual degree, not only relative to New York City but also relative to the traditional public schools from which they draw. The vast majority of applicants are admitted in lotteries that the schools hold when oversubscribed, and the vast majority of the lotteries are balanced. By balanced, we mean that we cannot reject the hypothesis that there are no differences in the observable characteristics of lotteried-in and lotteried-out students. Using the lotteries to form an intention-to-treat variable, we instrument for actual enrollment and compute the charter schools' average treatment-on-the-treated effects on achievement. These are 0.09 standard deviations per year of treatment in math and 0.04 standard deviations per year in reading. We estimate correlations between charter schools' policies and their effects on achievement. The policy with the most notable and robust association is a long school year--as long as 220 days in the charter schools.
    JEL: H0 H42 H75 I2 I21 I22 I28
    Date: 2009–04
  10. By: Becker, William E. (Indiana University); Round, David K. (University of South Australia)
    Abstract: Higher education, like any other commodity or service, has been viewed in a variety of economic frameworks. Little of this work, however, appears to have made any effort to define carefully the boundaries of the relevant market for higher education, which is the subject of this particular inquiry. Market definition is an essential preliminary step before any academic or policy investigation can properly be made into the forces that determine the behavior of the buyers and sellers of higher education, those who provide inputs into the education process, or those who fund or otherwise subsidize it. The authors spell out the key economic dimensions of a market, and illustrate their relevance for research that seeks to analyze the players and policies in the many distinct domestic and international markets that exist for the inputs and outputs of the higher education sector.
    Keywords: competition, efficiencies, market boundaries, markets, higher education, public policy
    JEL: A1 I2 L3
    Date: 2009–03
  11. By: Philippe Aghion; Mathias Dewatripont; Caroline M. Hoxby; Andreu Mas-Colell; André Sapir
    Abstract: We investigate how university governance affects research output, measured by patenting and international university research rankings. For both European and U.S. universities, we generate several measures of autonomy, governance, and competition for research funding. We show that university autonomy and competition are positively correlated with university output, both among European countries and among U.S. public universities. We then identity a (political) source of exogenous shocks to funding of U.S. universities. We demonstrate that, when a state's universities receive a positive funding shock, they produce more patents if they are more autonomous and face more competition from private research universities. Finally, we show that during periods when merit-based competitions for federal research funding have been most prominent, universities produce more patents when they receive an exogenous funding shock, suggesting that routine participation in such competitions hones research skill.
    JEL: H0 H52 I2 I23 I28 O3
    Date: 2009–04
  12. By: Sandra García; Jennifer Hill
    Abstract: During the last decade, conditional cash transfer programs have expanded in developing countries as a way to increase school enrollment and deter youth from dropping out of school. However, despite evidence of these programs’ positive impact on school enrollment and attendance, little is known about their impact on school achievement. Thus, using data from the Colombian conditional cash transfer program Familias en Acción, this study estimated the effect of the conditional subsidy on school achievement. It found that the program does have a positive effect on school achievement for children aged 7 to 12 living in rural areas but practically no effect for the same population living in urban areas. Moreover, the program may actually have a negative effect on the school achievement of adolescents, particularly those living in rural areas. Possible mechanisms of these effects are explored and discussed.
    Date: 2009–02–26
  13. By: Cory Koedel (Department of Economics, University of Missouri-Columbia); Julian Betts
    Abstract: Value-added modeling continues to gain traction as a tool for measuring teacher performance. However, recent research (Rothstein, 2009, forthcoming) questions the validity of the value-added approach by showing that it does not mitigate student-teacher sorting bias (its presumed primary benefit). Our study explores this critique in more detail. Although we find that estimated teacher effects from some value-added models are severely biased, we also show that a sufficiently complex value-added model that evaluates teachers over multiple years reduces the sorting-bias problem to statistical insignificance. One implication of our findings is that data from the first year or two of classroom teaching for novice teachers may be insufficient to make reliable judgments about quality. Overall, our results suggest that in some cases value-added modeling will continue to provide useful information about the effectiveness of educational inputs.
    Keywords: value added, measurement of teacher quality, outcome-based teacher quality
    JEL: I20 I28 I21
    Date: 2009–04–03
  14. By: Aldave, Iván (Central Bank of Peru and GREQAM); García-Peñalosa, Cecilia (GREQAM and CNRS)
    Abstract: The empirical evidence on the determinants of growth across countries has found that growth is lower when natural resources are abundant, corruption widespread and educational attainment low. An extensive literature has examined the way in which these three variables can impact growth, but has tended to address them separately. In this paper we argue that corruption and education are interrelated and that both crucially depend on a country’s endowment of natural resources. The key element is the fact that resources affect the relative returns to investing in human and in political capital, and, through these investments, output levels and growth. In this context, inequality plays a key role both as a determinant of the possible equilibria of the economy and as an outcome of the growth process.
    Keywords: natural resources, corruption, human capital, growth, inequality
    JEL: O11 O13 O15
    Date: 2009–04
  15. By: Bodas Freitas, Isabel Maria (Ecole de Management Grenoble, DISPEA Politecnico di Torino); Verspagen, Bart (UNU-MERIT, University of Maastricht)
    Abstract: This paper aims at analysing the impact of institutional and organizational factors on bridging industrial and university motivations for collaboration, as well as on the content, management and outcome of this relationship, in the Netherlands. In particular, we explore which type of projects, set up under specific industrial and university motivations, are more likely to face institutional barriers related to technology, market and organisational incentives frameworks. Moreover, we analyse the impact of technology transfer offices, research sponsoring, part-time professorships, and patenting on aligning university and industry motivations towards collaboration. To proceed empirically, thirty in-depth cases of successful university-industry knowledge transfer are analysed.
    Keywords: university-industry interaction, innovation cooperation
    JEL: O31 O32
    Date: 2009
  16. By: Emily Oster; Rebecca Thornton
    Abstract: This paper presents the results from a randomized evaluation that distributed menstrual cups (menstrual sanitary products) to adolescent girls in rural Nepal. Girls in the study were randomly allocated a menstrual cup for use during their monthly period and were followed for fifteen months to measure the effects of having modern sanitary products on schooling. While girls were 3 percentage points less likely to attend school on days of their period, we find no significant effect of being allocated a menstrual cup on school attendance. There were also no effects on test scores, self-reported measures of self-esteem or gynecological health. These results suggest that policy claims that barriers to girls' schooling and activities during menstrual periods are due to lack of modern sanitary protection may not be warranted. On the other hand, sanitary products are quickly and widely adopted by girls and are convenient in other ways, unrelated to short-term schooling gains.
    JEL: I21 J13 J16
    Date: 2009–04
  17. By: Amedeo Piolatto (Universidad de Alicante)
    Abstract: The literature on vouchers often concludes that a voucher-based system cannot be the outcome of a majority vote. This paper shows that it is possible to propose selective vouchers (of exogenous value) such that the majority of voters are in favour of selective vouchers. As long as the introduction of vouchers does not undermine the existence of public schools, introducing selective vouchers induces a Pareto improvement. Some agents use vouchers in equilibrium to buy private education, while the poorest agents continue attending public schools and enjoy an increase in per-capita expenditure.
    Keywords: positive public economics; education; vouchers; voting.
    JEL: H42 I20 I22 I28 I29 D70
    Date: 2009–03
  18. By: Chiara Pronzato; Magne Mogstad
    Abstract: High welfare dependency and poverty rate among lone mothers prompted a workfare reform of the Norwegian welfare system for lone parents: activity requirements were brought in, time limits imposed and benefit levels raised. To evaluate the reform we introduce an estimator that, unlike the much used difference-in-difference approach, accounts for the fact that policy changes are typically phased in gradually rather than coming into full effect immediately. We find that the reform has not only led to increased earnings and educational attainment – in the process lowering welfare caseloads and therefore easing the government’s financial burden – but also reduced poverty.
    Keywords: Welfare, lone mothers, workfare reform, difference-in-difference, activity requirements, time limits, earnings, education, poverty
    JEL: C23 I32 I38 J00
    Date: 2008–09
  19. By: Catherine Rodríguez; Fabio Sánchez T.
    Abstract: Using a unique combination of household and violence data sets and a duration analysis methodology, this paper estimates the effect that exposure to armed conflict has on school drop-out decisions of Colombian children between the ages of six and seventeen. After taking into account the possible endogeneity of municipal conflict related events through the use of instrumental variables, we find that armed conflict reduces the average years of schooling in 8.78% for all Colombian children. This estimate increases to 17.03% for children between sixteen and seventeen years old. We provide evidence that such effect may be induced mainly through higher mortality risks, and to lesser extent due to negative economic shocks and lower school quality; all of which induce a trade-off between schooling and child labor.
    Date: 2009–02–05
  20. By: Juan Baron
    Abstract: Using unique information for a cohort of Australian youth, this paper explores the association between youths’ perception of control (i.e. locus of control) and three educational outcomes: (i) Year 12 completion, (ii) whether youth obtained an Equivalent National Tertiary Entrance Rank (ENTER) score, and (iii) the actual ENTER score. By using a measure of socio-economic status based on 12 years of parental income support histories, the paper also investigates the association between growing up in a socio-economically disadvantaged household and subsequent educational outcomes. Additionally, the paper considers the hypothesis that disadvantage has an indirect effect on youths’ educational outcomes through its effect on locus of control. The results suggest that youths with a more internal locus of control (e.g. those who believe their actions determine their future outcomes) are more likely to complete Year 12, more likely to obtain an ENTER score, and obtain better ENTER scores. The evidence is also consistent with a negative relationship between disadvantage when growing up and youths’ educational outcomes. Even after controlling for demographic and family characteristics, youths who grew up in socioeconomically disadvantaged households are up to 10 per cent less likely to complete Year 12 and up to 20 per cent less likely to obtain an ENTER score. There is however no evidence of an indirect effect of being disadvantaged on educational outcomes through the effect of disadvantage on locus of control once other characteristics are accounted for. Although highly disadvantaged youths obtain ENTER scores that are four points lower than those of non-disadvantaged youth, locus of control shows only a small association with actual ENTER scores.
    Keywords: locus of control; parental socio-economic background; education
    JEL: I38 J24 H31
    Date: 2009–01
  21. By: Troske, Kenneth (University of Kentucky); Voicu, Alexandru (CUNY - College of Staten Island)
    Abstract: We analyze the way women's education influences the effect of children on their level of labor market involvement. We propose an econometric model that accounts for the endogeneity of labor market and fertility decisions, for the heterogeneity of the effects of children and their correlation with the fertility decisions, and for the correlation of sequential labor market decisions. We estimate the model using panel data from NLSY79. Our results show that women with higher education work more before the birth of the first child, but children have larger negative effects on their level of labor market involvement. Differences across education levels are more pronounced with respect to full time employment than with respect to participation. Other things equal, higher wages reduce the effect of children on labor supply. Controlling for wages, women with higher education face larger negative effects of children on labor supply, which suggest they are characterized by a combination of higher marginal product of time spent in the production of child quality and higher marginal product of time relative to the marginal product of other inputs into the production of child quality.
    Keywords: female labor supply, education, endogenous fertility decisions, heterogeneous children effects, multinomial probit model, Gibbs sampler
    JEL: C11 C15 J13 J22
    Date: 2009–03
  22. By: Croce, Giuseppe; Ghignoni, Emanuela
    Abstract: Following suggestions from theoretical and empirical literature on agglomeration and on social returns to education which emphasise the contribution of local knowledge spillovers to productivity and wage growth, this paper aims at uncovering the relationship between local human capital and training. Furthermore, we check the effects of other variables measuring distinctive features of local labour markets, like the degree of specialization, average firms’ size, intensity of job turnover, economic density, employment in R&D activities and some other control variables. Our key-results are consistent with the prediction that training should be more frequent in areas where the aggregate educational level is higher. Moreover, interaction between local and individual human capital is positive and significant for those with an upper secondary educational attainment. These results have proved to be robust since they are not altered when different definitions of local human capital are adopted or different sub-samples are considered (with the exception of female workers). We coped also with the problem of omitted variables and spatial sorting, that could bias econometric results, by means of a two-step strategy based on instrumental variables.
    Keywords: Keywords: training; knowledge spillovers; local labour markets
    JEL: O18 J24 R23
    Date: 2009–04
  23. By: Theodore Palivos (Department of Economics, University of Macedonia); Dimitrios Varvarigos (Department of Economics, University of Leicester)
    Abstract: We construct a simple model of education and growth in which young adults (children) spend a fraction of their time and old adults (parents) spend a fraction of their income on education. Both a strategic complementarity and an intergener- ational externality in the creation of human capital are present. The interactions between each pair of consecutive generations lead to rich dynamics. We show that multiple growth equilibria arise, some of them periodic and some aperiodic. We also ?nd a negative correlation between volatility and growth, without a one-way causal relationship between the two being, necessarily, present. Rather this negative correlation is driven by the structural characteristics of the economy.
    Keywords: Education, Human Capital, Economic Growth.
    JEL: E32 O41
    Date: 2009–04
  24. By: Raul Ramos (Faculty of Economics, University of Barcelona); Jordi Suriñach (Faculty of Economics, University of Barcelona); Manuel Artís (Faculty of Economics, University of Barcelona)
    Abstract: The paper analyses the link between human capital and regional economic growth in the European Union. Using different indicators of human capital calculated from census microdata, we conclude that the recent economic performance of European regions is associated to an increase in overeducation. In fact, measures of educational mismatch seem to have a stronger connection to regional economic performance than other traditional measures of human capital stocks.
    Keywords: Regional economic growth, human capital, educational mismatch, overeducation
    Date: 2009–03
  25. By: Claudia Trentini (EUI Florence); Lídia Farré (Universidad de Alicante)
    Abstract: This paper investigates the implications of major ¯nancial markets crises for the human capital accumulation decisions of households. We use data for Argentinean households over the period 1995-2002 to examine households' response to negative idiosyncratic income shocks in di®erent macroeconomic scenarios. In particular we study how teenagers' school progress responds to household head unemployment during periods of high economic growth and compare it to the response during recession years, when families are more likely to be ¯nancially constrained. After accounting for the potential endogeneity of household head unemployment we ¯nd that school failure in response to unemployment shocks increases during periods of economic instability and that, at least for boys, this results from a greater involvement in labor market activities. Our results add to the existing literature on the long term cost of macroeconomic crises.
    Keywords: imperfect credit markets, human capital, parental unemployment
    JEL: D52 J22 J24
    Date: 2009–03
  26. By: Elizabeth Cascio; Nora Gordon; Ethan Lewis; Sarah Reber
    Abstract: This paper examines how a large conditional grants program influenced school desegregation in the American South. Exploiting newly collected archival data and quasi-experimental variation in potential per-pupil federal grants, we show that school districts with more at risk in 1966 were more likely to desegregate just enough to receive their funds. Although the program did not raise the exposure of blacks to whites like later court orders, districts with larger grants at risk in 1966 were less likely to be under court order through 1970, suggesting that tying federal funds to nondiscrimination reduced the burden of desegregation on federal courts.
    JEL: H7 I21
    Date: 2009–04
  27. By: Bruce Chapman; Kiatanantha Lounkaew
    Abstract: This paper illustrates the extent of implicit taxpayer subsidies under four possible income contingent loan (ICL) arrangements for Thailand: TICAL, implemented in 2007 only, a variant of TICAL, and two alternative ICL schemes. The implicit taxpayer subsidy calculated with respect to average graduate earnings for TICAL-type arrangements is between 25-40 per cent; however, the average implicit subsidies for the two alternatives are close to zero. When account is taken of disaggregated graduate earnings, the subsidies for TICALtype schemes increase to about 30-55 per cent. The subsidy is between 3-18 per cent for our alternative ICLs, depending on the form of the real rate of interest incurred. These results show that there is a viable ICL alternative to TICAL, which are of greatest benefit for low levels of debt. When the debt is relatively large the subsidies of even well designed schemes can be as high as 50 per cent.
    Keywords: income contingent loans; student loans; higher education financing
    JEL: I00 I2 I20 I21 I22 I28
    Date: 2009–01
  28. By: Schweri, Jürg (Swiss Federal Institute for Vocational Education and Training); Hartog, Joop (University of Amsterdam); Wolter, Stefan (University of Bern)
    Abstract: We use a unique data set about the wage distribution that Swiss students expect for themselves ex ante, deriving parametric and non-parametric measures to capture expected wage risk. These wage risk measures are unfettered by heterogeneity which handicapped the use of actual market wage dispersion as risk measure in earlier studies. Students in our sample anticipate that the market provides compensation for risk, as has been established with Risk Augmented Mincer earnings equations estimated on market data: higher wage risk for educational groups is associated with higher mean wages. With observations on risk as expected by students we find compensation at similar elasticities as observed in market data. The results are robust to different specifications and estimation models.
    Keywords: wage, expectations, wage risk, risk compensation, skewness
    JEL: D8 I2 J2 J3
    Date: 2009–03

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