nep-edu New Economics Papers
on Education
Issue of 2009‒05‒02
fourteen papers chosen by
Joao Carlos Correia Leitao
Technical University of Lisbon

  1. How Would One Extra Year of High School Affect Wages? Evidence from a Unique Policy Change By Krashinsky, Harry
  2. The impact of teacher characteristics on student performance: An analysis using hierarchical linear modelling By Paula Armstrong
  3. Tracking can be more equitable than mixing: peer effects and college attendance. By Marisa Hidalgo Hidalgo
  4. Infrastructure Choices in Education: Location, Build or Repair By Armin Zeinali; Glenn Jenkins; Andrey Klevchuk
  5. The Pursuit of Post-Secondary Education: A Comparison of First Nations, African, Asian and European Canadian Youth By Thiessen, Victor
  6. Education in Italy: is there any return? By Germana Bottone
  7. Why tenure? By Cater, Bruce; Lew, Byron; Pivato, Marcus
  8. Intergenerationalities: Some Educational Questions on Quality, Quantity and Opportunity By Kanbur, Ravi
  9. Choosing the Field of Study in Post-Secondary Education: Do Expected Earnings Matter? By Beffy, Magali; Fougère, Denis; Maurel, Arnaud
  10. Treatment evaluation in the presence of sample selection By Martin Huber
  11. Schooling Inequality, Crises, and Financial Liberalization in Latin America By Jere R. Behrman; Nancy Birdsall; Gunilla Pettersson
  12. The Economic Return on New Immigrants' Human Capital: the Impact of Occupational Matching By Goldmann, Gustave; Sweetman, Arthur; Warman, Casey
  13. Wages and Human Capital in the U.S. Financial Industry: 1909-2006 By Philippon, Thomas; Reshef, Ariell
  14. Edad, educación e ingresos en 349 prostitutas en Bogotá By Isaac de León-Beltrán; Eduardo Salcedo-Albarán; Mauricio Rubio

  1. By: Krashinsky, Harry
    Abstract: This paper uses a unique policy change in Canada’s most populous province, Ontario, to provide direct evidence on the effect of reducing the length of high school on labour market outcomes for high school graduates. In 1999, the Ontario government eliminated the fifth year of education from its high schools, and mandated a new four-year program. This policy change created two cohorts of students who graduated from high school together with different amounts of education, thus making it possible to identify the effect of one extra year of high school education on earnings. Using restricted survey data, the results demonstrate that students who receive one less year of high school education receive wages that are approximately ten percent lower than their counterparts one year after graduation, and these effects persist two years after graduation. Using birth year to instrument for educational attainment produces estimates that are even higher than the cross-sectional findings, but quite consistent with the existing literature on the return to education. These results are a significant contribution to the literature on the return to education because unlike prior changes to the educational system, this change in schooling laws results in two cohorts entering the labour market simultaneously. As such, business cycle effects do not confound the results.
    Keywords: Human Capital, Returns to Education, Years of Schooling, Ontario Double Cohort
    JEL: I20 I28 C10
    Date: 2009–04–22
  2. By: Paula Armstrong (Department of Economics, University of Stellenbosch)
    Abstract: More than a decade after South Africa’s transition from apartheid, the racially delineated picture of education in the country remains. Brahm Fleisch (2008) refers to the South Africa’s education system as consisting effectively of two education systems: the well-performing historically white system, and the weak-performing historically black system. Significant difference in educational quality exist between these two systems. It is widely acknowledged that the role of teachers in the quality of education is vital. This paper makes use of Hierarchical Linear Modeling to investigate which teacher productive characteristics impact first of all on average student performance, and secondly, on the relationship between the socioeconomic status of students and the performance. It is found that teachers who have specialized in the subject which they teach or in the education of that subject at university, as well as teachers with between 26 and 30 years of teaching experience influence student performance positively. No teacher productive characteristics are found to weaken the relationship between students’ socioeconomic status and their performance.
    Keywords: Analysis of education
    JEL: I21
    Date: 2009
  3. By: Marisa Hidalgo Hidalgo (Department of Economics, Universidad Pablo de Olavide)
    Abstract: Parents and policy makers often wonder whether, and how, the choice between a tracked or a mixed educational system affects the efficiency and equity of national educational outcomes. This paper analyzes this question taking into account their impact on educational results at later stages and two main results are found. First, it shows that tracking can be the efficient system in societies where the opportunity cost of college attendance is high or the pre-school achievement distribution is very dispersed. Second, this paper shows that although conventional wisdom suggests that equality of opportunities is best guaranteed under mixing, this is not necessarily the case. In fact, tracking is the most equitable system for students with intermediate levels of human capital required to attend college..
    Keywords: Peer Effects, Tracking, Mixing, College attendance gap.
    JEL: D63 I28 J24
    Date: 2009–04
  4. By: Armin Zeinali (Department of Economics, Queen's University, Canada); Glenn Jenkins (Queen's University, Kingston, On, Canada, Eastern Mediterranean University, North Cyprus); Andrey Klevchuk (Cambridge Resources International Inc.)
    Abstract: The purpose of this study is to develop a model to arrive at a joint optimizing strategy for the use of a given capital budget for the construction of new school buildings and for the repair of the already existing schools. This is to be done in a way that will have the maximum positive impact on the enhancement of the education system. Cost effectiveness analysis is used as the main analytical tool in the analysis. A key factor of the model is that it gives one the optimal mix of repair versus new construction that should be undertaken under a fixed budget constraint. The model is simulated using a sample data set from the information available for the education sector of Limpopo Province, South Africa. It utilizes a very basic set of information that is available in all school districts across the province. Application of this model for the selection of infrastructure investments (either building or repair) in the education sector would increase the efficiency of capital expenditure in this sector. This is particularly the case for the countries that are faced with a large excess demand for school buildings.
    Keywords: education, cost effectiveness, school location, school construction, school repair, South Africa
    JEL: D61 I28 H52 H75
    Date: 2009–04
  5. By: Thiessen, Victor
    Abstract: Using the nationally representative longitudinal Youth in Transition Survey, this paper examines the argument that inferior educational outcomes of various visible minorities and immigrants can be attributed to their socio-economic disadvantages, while superior outcomes of other visible minorities is due to their cultural supports. The analyses document sizable inequalities in educational pathways of First Nations, visible minorities, and immigrants. However, neither structural location nor cultural attributes (nor both in conjunction) totally account for differences in their educational pathways nor can they be reduced to a simple pattern whereby structural disadvantages account for inferior pathways and cultural factors for superior ones.
    Keywords: Aboriginals, Visible Minorities, Immigrants, Academic Performance, Educational Attainment, Post-Secondary Education
    JEL: I20 I21 I29
    Date: 2009–04–22
  6. By: Germana Bottone (ISAE - Institute for Studies and Economic Analyses)
    Abstract: The “return to education” issue has been widely investigated in the economic literature. However, how the social value of education can affect its economic return and individual decisions on “human capital” investments has been somewhat neglected. The paper criticises the traditional definition of human capital and the premises of Becker’s equation and considers the following questions: does education have a consistent return in Italy? If not, does education have any social value?. From an economic point of view and at a conceptual level, numerous difficulties arise when one seeks to define “human capital”. One may make a list of factors endogenous to an individual, such as education, training and ability, and of factors exogenous to him/her such as level of family education, social capital, system of relations, freedom of knowledge transmission, institutions. All of these factors may affect “human capital”. Moreover, the decision to invest in “human capital” may not be completely rational. Rationality would probably instead suggest on-the-job training and training. Education has a cultural, social and historical value; as a consequence, individuals may make decisions about the proper investment in education not only by considering marginal costs and future benefits of that investment, but for other reasons as well.
    Keywords: human capital, bounded rationality, institutional economics.
    JEL: J24 J31
    Date: 2009–03
  7. By: Cater, Bruce; Lew, Byron; Pivato, Marcus
    Abstract: Academic research is a public good whose production is supported by the tuition-paying students that a faculty's research accomplishments attract. A professor's spot contribution to the university's revenues thus depends not on her spot research production, but rather on her cumulative research record. We show that a profit-maximizing university will apply a `high' minimum retention standard to the production of a junior professor who has no record of past research, but a `zero' retention standard to the spot production of a more senior professor whose background includes accomplishments sufficient to have cleared the `high' probationary hurdle.
    Keywords: academic tenure; labour contract; up-or-out
    JEL: J41 J31
    Date: 2009–01–17
  8. By: Kanbur, Ravi
    Abstract: This paper raises a number of issues in thinking about and addressing the intergenerational transmission of disadvantage. Starting with choice subject to constraints by parents as determining outcomes for children, the paper identifies sequences of interventions to relieve âbinding constraintsâ in the expansion of education. But the fact that parents choose for children is shown to raise a number of questions on normative aspects of inequality measurement. The main conclusions are as follows: (i) A key analytical task is to identify whether education is supply constrained or demand constrained; (ii) The cost-benefit analysis of identifying the âmost binding constraintâ requires the estimation of an education quality production function; (iii) The recent focus on âquality as opposed to quantityâ in education is not self-evidently pro-poor; (iv) The intergenerational links inherent in education between parental choice and childrenâs outcomes, raise serious conceptual and empirical questions on attempts to separate out inequality of opportunity from inequality of outcomes.
    Keywords: Intergenerationalities, Health Economics and Policy, International Development, Political Economy, Public Economics,
    Date: 2009–01–26
  9. By: Beffy, Magali (CREST-INSEE); Fougère, Denis (CREST-INSEE); Maurel, Arnaud (ENSAE-CREST)
    Abstract: This paper examines the determinants of the choice of the major when the length of studies is uncertain, by using a framework in which students entering post-secondary education are assumed to anticipate their future earnings. For that purpose, we use French data coming from the 1992 and 1998 Génération surveys collected by the Centre d'Etudes et de Recherches sur l'Emploi et les Qualifications (CEREQ, Marseille). Our econometric approach is based on a semi-structural three-equations model, which is identified thanks to some exclusion restrictions. We exploit in particular exogenous variations in the earnings returns associated with the majors across the business cycle, in order to identify the causal effect of expected earnings on the probability of choosing a given major. Relying on a three-component mixture distribution, we account for correlation between the unobserved individual-specific terms affecting the preferences for the majors, the unobserved individual-specific factors entering the equation determining the length of studies within each major, and that affecting the labor market earnings equation. Following Arcidiacono and Jones (2003), we use the EM algorithm with a sequential maximization step to produce consistent parameter estimates. Simulating for each given major a 10 percent increase in the expected earnings suggests that expected earnings have a statistically significant but quantitatively small impact on the allocation of students across majors.
    Keywords: post-secondary education, major choice, returns to education, EM algorithm
    JEL: J24 C35 D84
    Date: 2009–04
  10. By: Martin Huber
    Abstract: Sample selection is inherent to a range of treatment evaluation problems as the estimation of the returns to schooling or of the effect of school vouchers on test scores of college admissions tests, when some students abstain from the test in a non-random manner. Parametric and semiparametric estimators tackling selectivity typically rely on restrictive functional form assumptions that are unlikely to hold in reality. This paper proposes nonparametric weighting and matching estimators of average and quantile treatment effects that are consistent under more general forms of sample selection and incorporate effect heterogeneity with respect to observed characteristics. These estimators control for the double selection problem (i) into the observed population (e.g., working or taking the test) and (ii) into treatment by conditioning on nested propensity scores characterizing either selection probability. Weighting estimators based on parametric propensity score models are shown to be root-n-consistent and asymptotically normal. Simulations suggest that the proposed methods yield decent results in scenarios when parametric estimators are inconsistent.
    Keywords: treatment effects, sample selection, inverse probability weighting, propensity score matching.
    JEL: C13 C14 C21
    Date: 2009–04
  11. By: Jere R. Behrman; Nancy Birdsall; Gunilla Pettersson
    Abstract: Latin America is characterized by high and persistent schooling, land, and income inequalities and extreme income concentration. In a highly unequal setting, powerful interests are more likely to dominate politics, pushing for policies that protect privileges rather than foster competition and growth. As a result, changes in policies that political elites resist may be postponed in high-inequality countries to the detriment of overall economic performance. This paper examines the relationship between structural, high inequality—measured by high levels of schooling inequality—and liberalization of the financial sector for a sample of 37 developing and developed countries for the period 1975 to 2000. Liberalization of the financial sector can be broadly thought of in the Latin American pre-2000 context as opening credit markets that earlier were largely restricted, including by ending directed credit. For our measure of structural inequality we use data on schooling Gini coefficients that have not previously been used in this context. In our sample, we find that increases in financial liberalization were associated with bank crises and other domestic and external shocks, and that higher schooling inequality reduces the impetus for liberalization brought on by bank crises.
    Keywords: Latin America, education, inequality, financial liberalization
    Date: 2009–03
  12. By: Goldmann, Gustave; Sweetman, Arthur; Warman, Casey
    Abstract: Using a data set that provides information on source country employment, we examine the effect of source and host country occupational matching on earnings and the economic rate of return to the foreign human capital of immigrants in Canada. Examining occupational distributions we find that immigrants converge very quickly to the skill distribution of the Canadian population in terms of the main job worked, although four years after landing they are still below the source country distribution. We also find that for a large proportion of immigrants, their intended occupation differs from their source country occupation. Although immigrants who are able to match their source and host country occupations obtain higher earnings, successful occupational matching does not have any impact on the return to foreign potential work experience. However, immigrants who match their source and host country occupations do have a higher return to schooling, particularly for females.
    Keywords: Immigrants, Occupational Matching, Human Capital, Canada
    JEL: J24 J31 J61
    Date: 2009–04–22
  13. By: Philippon, Thomas; Reshef, Ariell
    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.
    Keywords: finance; human capital; regulation; wages
    JEL: G0 J0 N0 O0
    Date: 2009–04
  14. By: Isaac de León-Beltrán; Eduardo Salcedo-Albarán; Mauricio Rubio
    Abstract: Se aplicó una encuesta a 349 mujeres prostitutas en Bogotá, Colombia. Se encontró que la edad y el nivel educativo son variables correlacionadas con los ingresos reportados por mujeres prostitutas. Las mujeres más jóvenes reportan más ingresos que las mujeres de mayor edad. Las mujeres con educación universitaria reportan más ingresos que las mujeres de menor escolaridad.
    Date: 2008–10–08

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