nep-edu New Economics Papers
on Education
Issue of 2009‒10‒10
twenty-two papers chosen by
Joao Carlos Correia Leitao
Polytechnic Institute of Portalegre and Technical University of Lisbon

  1. Earnings Differences Between Transfer and Non-transfer Students By Holmlund, Linda; Regnér, Håkan
  2. Do value-added estimates add value ? accounting for learning dynamics By Andrabi, Tahir; Das, Jishnu; Khwaja, Asim Ijaz; Zajonc, Tristan
  3. Do Tuition Fees Affect the Mobility of University Applicants? Evidence from a Natural Experiment By Dwenger, Nadja; Storck, Johanna; Wrohlich, Katharina
  4. School Choice and Earnings: A Case of Indonesia By Mohamad Fahmi
  5. Pay for Percentile By Barlevy, Gadi; Neal, Derek
  6. Wage Returns to University Disciplines in Greece: Are Greek Higher Education Degrees Trojan Horses? By Livanos, Ilias; Pouliakas, Konstantinos
  7. Does Military Draft Discourage Enrollment in Higher Education? Evidence from OECD Countries By Keller, Katarina; Poutvaara, Panu; Wagener, Andreas
  8. The Causal Effect of Education on Wages Revisited By Dickson, Matt
  9. The Americanization of European Higher Education and Research By Borghans, Lex; Cörvers, Frank
  10. Understanding Compulsory Schooling Legislation: A Formal Model and Implications for Empirical Analysis By Gradstein, Mark; Justman, Moshe
  11. Education and Its Distributional Impacts on Living Standards By Takahiro Ito
  12. Does the Journal Impact Factor help make a Good Indicator of Academic Performance? By Mishra, SK
  13. Income contingent tuition fees for universities By Neil Shephard
  14. Essays on Child Care and Higher Education By Holmlund, Linda
  15. Class Size and Class Heterogeneity By De Giorgi, Giacomo; Pellizzari, Michele; Woolston, William Gui
  16. Could Education Promote the Israeli-Palestinian Peace Process? By El-Attar, Mayssun
  17. Regional Economic Growth and Human Capital: The Role of Overeducation By Ramos, Raul; Surinach, Jordi; Artís, Manuel
  18. International Human Capital Formation, Brain Drain and Brain Gain: A conceptual Framework By Bernard Franck; Robert F. Owen
  19. Education Supérieure Migration des Elites Norme Culturelle et Formation de la Diaspora By Jellal, Mohamed
  20. The Effect of College Quality on Earnings Evidence from Sweden By Holmlund, Linda
  21. Social Divisions in School Participation and Attainment in India: 1983-2004 By M. Niaz Asadullah; Uma Kambhampati; Florencia Lopez Boo
  22. Schooling, Fertility, and Married Female Labor Supply: What Role for Health? By Matthias Cinyabuguma; Bill Lord; Christelle Viauroux

  1. By: Holmlund, Linda (Department of Economics, Umeå University); Regnér, Håkan (Saco)
    Abstract: Using data on three cohorts of Swedish university entrants, this study examines whether earnings vary between students who change universities and students who do not change. The results show that earnings, during the first years after leaving the university, are significantly lower for students who change universities compared to students who do not change. Earnings differences decrease significantly over time and over the earnings distribution. The pattern in the estimates seems consistent with non-transfer students, who have higher earnings because of their relatively earlier labor market entry, and transfer students catching up because of their additional human-capital investments.
    Keywords: College education; University choice; Earnings distribution
    JEL: J24 J31
    Date: 2009–10–02
  2. By: Andrabi, Tahir; Das, Jishnu; Khwaja, Asim Ijaz; Zajonc, Tristan
    Abstract: Evaluations of educational programs commonly assume that what children learn persists over time. The authors compare learning in Pakistani public and private schools using dynamic panel methods that account for three key empirical challenges to widely used value-added models: imperfect persistence, unobserved student heterogeneity, and measurement error. Their estimates suggest that only a fifth to a half of learning persists between grades and that private schools increase average achievement by 0.25 standard deviations each year. In contrast, estimates from commonly used value-added models significantly understate the impact of private schools’ on student achievement and/or overstate persistence. These results have implications for program evaluation and value-added accountability system design.
    Keywords: Education For All,Tertiary Education,Secondary Education,Primary Education,Teaching and Learning
    Date: 2009–09–01
  3. By: Dwenger, Nadja (DIW Berlin); Storck, Johanna (DIW Berlin); Wrohlich, Katharina (DIW Berlin)
    Abstract: Several German states recently introduced tuition fees for university education. We investigate whether these tuition fees influence the mobility of university applicants. Based on administrative data of applicants for medical schools in Germany, we estimate the effect of tuition fees on the probability of applying for a university in the home state. We find a small but significant reaction: The probability of applying for a university in the home state falls by 2 percentage points (baseline: 69%) for high-school graduates who come from a state with tuition fees. Moreover, we find that students with lower high-school grades react more strongly to tuition fees. This might have important effects on the composition of students across states.
    Keywords: mobility of high-school graduates, tuition fees, natural experiment
    JEL: I22 I28 H75 R23
    Date: 2009–09
  4. By: Mohamad Fahmi (Department of Economics, Padjadjaran University)
    Abstract: Public schools in Indonesia are widely perceived have better inputs and to be superior to private schools. Public schools also benefit advantages of high-scoring peer effect as entry to some junior secondary public schools in urban area is based on national score test in elementary school. In this paper, I attempt to confirm the perception of superiority of public school in Indonesia by comparing the yearly earnings of four types of schools group; Public, Private Secular, Private Islam, and Private Christian. I use a large-scale longitudinal observation of individual and household level on socioeconomic and health survey, Indonesia Family Life Survey (IFLS) 2000 to estimate the effectiveness junior secondary education in Indonesia. To correct for sample selection bias, I use the two-step method proposed by Bourguignon et al. As a result of insignificant all selectivity bias coefficients, I use the OLS estimation to calculate the earnings decompositions. The insignificant selection bias coefficients suggest that the OLS estimation is unbiased. I use the Blinder-Oaxaca decomposition with Reimers’ decomposition technique to estimate earning differential between public and three types of private school graduates. The results of earnings decomposition from OLS estimation, suggest that earning of people who graduate from public school are 25 per cent and 35.2 per cent higher than their counterparts from private nonreligious and private Islam. On the other hand, student who schooled at private Christian school enjoys 0.28 per cents higher earnings that public.
    Keywords: Parent choice, Education, School effectiveness, earnings, Indonesia
    JEL: J31
    Date: 2009–09
  5. By: Barlevy, Gadi (Federal Reserve Bank of Chicago); Neal, Derek (University of Chicago)
    Abstract: We propose an incentive pay scheme for educators that links educator compensation to the ranks of their students within appropriately defined comparison sets, and we show that under certain conditions our scheme induces teachers to allocate socially optimal levels of effort to all students. Because this scheme employs only ordinal information, our scheme allows education authorities to employ completely new assessments at each testing date without ever having to equate various assessment forms. Thus, our scheme removes incentives for teachers to teach to a particular assessment form and eliminates any opportunities to influence reward pay by corrupting the equating process or the scales used to report assessment results. Having shown that cardinal measures of achievement growth over time are not a necessary ingredient of incentive systems for educators, we note that education authorities can employ our scheme as a means of providing incentives for educators while employing a separate system for measuring growth in student achievement that involves no stakes for educators. This approach creates no incentives for educators to take actions that contaminate the measurement of student progress.
    Keywords: compensation, education, tournaments
    JEL: J33 I20
    Date: 2009–08
  6. By: Livanos, Ilias (University of Warwick); Pouliakas, Konstantinos (University of Aberdeen)
    Abstract: This paper examines the wage returns to qualifications and academic disciplines in the Greek labour market. Exploring wage responsiveness across various degree subjects in Greece is interesting, as it is characterised by high levels of graduate unemployment, which vary considerably by field of study, and relatively low levels of wage flexibility. Using micro-data from recently available waves (2002-2003) of the Greek Labour Force Survey (LFS), the returns to academic disciplines are estimated by gender and public/private sector. Quantile regressions and cohort interactions are also used to capture the heterogeneity in wage returns across the various disciplines. The results show considerable variation in wage premiums across the fields of study, with lower returns for those that have a marginal role to play in an economy with a rising services/shrinking public sector. Educational reforms that pay closer attention to the future prospects of university disciplines are advocated.
    Keywords: academic disciplines, wage returns, higher education, Greece
    JEL: J24 J31 J38
    Date: 2009–09
  7. By: Keller, Katarina (Susquehanna University); Poutvaara, Panu (University of Helsinki); Wagener, Andreas (University of Hannover)
    Abstract: Using data from 1960-2000 for OECD countries, we analyze the impact of compulsory military service on the demand for higher education, measured by students enrolled in tertiary education as a share of the working-age population. Based on a theoretical model, we hypothesize that military draft has a negative effect on education. Empirically, we confirm this for the existence of conscription, albeit usually at low statistical significance. However, the intensity of its enforcement, measured by the share of the labor force conscripted by the military and the duration of service, significantly reduces enrollment in higher education.
    Keywords: human capital, conscription
    JEL: H56 I20
    Date: 2009–09
  8. By: Dickson, Matt (University of Bristol)
    Abstract: This paper estimates the return to education using two alternative instrumental variable estimators: one exploits variation in schooling associated with early smoking behaviour, the other uses the raising of the minimum school leaving age. Each instrument estimates a 'local average treatment effect' and my motivation is to analyse the extent to which these differ and which is more appropriate for drawing conclusions about the return to education in Britain. I implement each instrument on the same data from the British Household Panel Survey, and use the over-identification to test the validity of my instruments. I find that the instrument constructed using early smoking behaviour is valid as well as being strong, and argue that it provides a better estimate of the average effect of additional education, akin to ordinary least squares but corrected for endogeneity. I also exploit the dual sources of exogenous variation in schooling to derive a further IV estimate of the return to schooling. I find the OLS estimate to be considerably downward biased (around 4.6%) compared with the IV estimates of 12.9% (early smoking), 10.2% (RoSLA) and 12.5% (both instruments).
    Keywords: human capital, endogeneity, local average treatment effect
    JEL: I20 J30
    Date: 2009–09
  9. By: Borghans, Lex (Maastricht University); Cörvers, Frank (ROA, Maastricht University)
    Abstract: Over the past two decades there has been a substantial increase in the mobility of students in Europe, while also research has become much more internationally oriented. In this paper we document changes in the structure of research and higher education in Europe and investigate potential explanations for the strong increase in its international orientation. While higher education started to grow substantially around 1960, only a few decades later, research and higher education transformed gradually to the American standard. Decreased communication costs are likely causes for this trend. This transformation is most clearly revealed in the change of language used in research from the national language, Latin, German and French to English. Smaller language areas made this transformation earlier while there are also clear timing differences between research fields. Sciences and medicine tend to switch to English first, followed by economics and social sciences, while for law and arts only the first signs of such a transformation are currently observed. This suggests that returns to scale and the transferability of research results are important influences in the decision to adopt the international standard.
    Keywords: higher education, research, Americanization
    JEL: O31 I23
    Date: 2009–09
  10. By: Gradstein, Mark (Ben Gurion University); Justman, Moshe (Ben Gurion University)
    Abstract: We construct a simple model of compulsory schooling in which legislation and compliance are endogenously determined by individuals disciplined by social norms, optimizing their voting decisions and the school attendance of their children. The model provides a formal framework for interpreting empirical results on the effect of compulsory-schooling legislation (CSL) on enrollment. This sheds light on the use of CSL as an instrumental variable to identify the benefits of schooling, suggesting how the estimates it produces may be biased.
    Keywords: compliance norms, compulsory schooling, education
    JEL: I21
    Date: 2009–09
  11. By: Takahiro Ito
    Abstract: This paper investigates the determinants of living standards (measured by per capita consumption expenditure) at the household level, addressing heterogeneity in returns to education and endogeneity of educational status. The estimation results obtained through an instrumental variables quantile regression suggest that the endogeneity of education matters in determining the causal effect of education on living standards, while no evidence of the heterogeneity in the rate of returns to education is found. However, the results also provide evidence that impacts of other determinants vary significantly over the outcome (expenditure) distribution, and consequently a simulation based on the results shows that poverty alleviation impacts of education differs substantially between the instrumental variables quantile regression and standard instrumental variables regression results. The comparison of the two indicates the possibility that the impact on poverty reduction is likely to be overestimated in the standard instrumental variable regression.
    Keywords: poverty, heterogeneous returns to education, instrumental variables quantile regression
    JEL: D12 I21 I32 O15
    Date: 2009–08
  12. By: Mishra, SK
    Abstract: After the notification of the University Grants Commission (Minimum Qualifications for Appointment of Teachers and other Academic Staff in Universities and Colleges and Measures for the Maintenance of Standards in Higher Education) Regulations, 2009 on September 23rd 2009, publication of research papers/articles in reputed journals has become an important factor in assessment of the academic performance of teachers in colleges and universities in India. One of the measures of reputation and academic standard (rank or importance) of a journal is the so-called ‘Impact Factor.’ This study makes a detailed analysis of Journal Impact Factors across the disciplines. It finds that if journal impact factor is used to assess the academic performance of individuals (for the purpose of selection, promotion, etc) and it is not borne in mind that due to vast differences in the nature of distribution of impact factors across the disciplines they are not justifiably comparable, a below average scholar in the one discipline (wherein the journal impact factor is negatively skewed) will rank higher and will be honored (and benefitted) more than another scholar in some other discipline (wherein the journal impact factor is positively skewed). It may be noted that in the university departments there are specializations with low impact factor journals and other specializations with very high impact factor journals. But the teachers/researchers of different specializations in the departments compete with each other for promotion. Whether the researchers with an unfortunate specialization (wherein the journal impact factor is positively skewed) receive justice on such criteria remains an open question.
    Keywords: Journal impact factor; University Grants Commission; regulation; India; UGC; Higher education; academic performance indicator; API; skewness
    JEL: A23 I23 I28 M51
    Date: 2009–10–07
  13. By: Neil Shephard
    Abstract: I show that the fiscal position of the UK means it will be very hard for the next government to allow the undergraduate fee cap to increase beyond the rate of inflation. The funding postion of the higher education sector can be improved by the government removing the interest rate subsidy it currently gives to students. However, even this does not really allow the fee cap to increase markedly as any increase would lead to the Government’s loan book expanding. I suggest each university should be allowed to introduce its own income contingent fee, on top of the existing national funding structure. Each graduate would only have to pay these fees to its university if their income rises beyond the point of paying off their maintenance and state tuition loans. I show these new fees are fiscally neutral and have no impact on the loan book or the financial position of the universities which do not introduce such fees. Such fees have the potential to provide a long-run solution to the repeated underfunding of undergraduate education at a number of English universities and reduce the fiscal pressure the state is under.
    JEL: I22 C8
    Date: 2009
  14. By: Holmlund, Linda (Department of Economics, Umeå University)
    Abstract: This thesis consists of a summary and four self-contained papers. Paper [I] examines whether fathers influence the time their children spend in subsidized child care. Two non-nested models of family child care demand are estimated. The parameter estimates indicate that several characteristics of the father are associated with the time his child spends in child care. J-tests and bootstrapped J-tests also show that a model where the father’s characteristics are excluded can be rejected in favour of a model where his characteristics are included. Paper [II] considers the effects of the Swedish child care fee reform on public expenditures and taxation in the municipalities. A difference-indifference approach is employed where outcomes are compared with respect to the municipalities’ pre-reform fee systems. The results show that pre-reform characteristics determine taxes and child care expenditures in the post-reform period. It is also found that changes in child care quality were not connected to the pre-reform systems characteristics. Paper [III] provides evidence of the effect of college quality on earnings in Sweden. The results suggest that the link between college quality and earnings is weak. A small positive effect is found for individuals that are likely to work full time. Controlling for region of work affects the estimated effects, indicating a correlation between choice of college quality and choice of labour market region. In Paper [IV], earnings differences between transfer and non-transfer students are analysed. The results show that earnings, during the first years after leaving the university, are significantly lower for students who change universities compared to students who do not change. The earnings differences decrease significantly over time and over the earnings distribution.
    Keywords: Child care demand; subsidized child care; dual care provider model; local public expenditures; income taxation; college quality; earnings; selection on observables; university choice; earnings distribution
    JEL: H71 H72 I21 J13 J24 J31
    Date: 2009–10–02
  15. By: De Giorgi, Giacomo (Stanford University); Pellizzari, Michele (Bocconi University); Woolston, William Gui (Stanford University)
    Abstract: We study how class size and composition affect the academic and labor market performances of college students, two crucial policy questions given the secular increase in college enrollment. We rely on the random assignment of students to teaching classes. Our results suggest that a one standard deviation increase in the class-size would result in a 0.1 standard deviation deterioration of the average grade. Further, the effect is heterogenous as female and higher income students seem almost immune to the size of the class. Also, the effects on performance of class composition in terms of gender and ability appears to be inverse U-shaped. Finally, a reduction of 20 students (one standard deviation) in one's class size has a positive effect on monthly wages of about 80 Euros (115 USD) or 6% over the average.
    Keywords: class size, heterogeneity, experimental evidence, academic performance, wages
    JEL: A22 I23 J30
    Date: 2009–09
  16. By: El-Attar, Mayssun (Institute for Fiscal Studies, London)
    Abstract: This paper explores Palestinians' attitudes towards a peace process and their determinants, with a particular focus on the role of education. Understanding the factors that shape attitudes towards peace is important in order to be successful in negotiations or in implementing a peace agreement. In the literature, there is particular disagreement about the role of education. While some authors have linked violent and extreme positions to ignorance and to low market opportunities, others have found that education is positively correlated with being a member of a terrorist group. To better understand the role of education I decompose the attitudes towards peace into two dimensions; attitudes towards reconciliation and attitudes towards concessions. To measure these attitudes, I use a flexible item response model proposed by Spady (2007), which allows to take into account the multidimensionality of the concepts. The results show that education has a positive effect on attitudes towards concessions but a negative effect on attitudes towards reconciliation. This may occur because relative to a situation of peace, highly educated individuals are more strongly affected by current depressed economic conditions in Palestine. They therefore have more to gain from a peace agreement and may thus be more willing to make concessions. At the same time, they may be more frustrated and therefore less willing to reconcile. I also find that their attitudes to reconciliation move closely with aggregate economic conditions, while those of less educated individual are also influenced by local factors such as the construction of the separation barrier in their region of residence.
    Keywords: conflict resolution, education, latent attitudes, item response models
    JEL: I20 O15 O53
    Date: 2009–09
  17. By: Ramos, Raul (University of Barcelona); Surinach, Jordi (University of Barcelona); Artís, Manuel (University of Barcelona)
    Abstract: The paper analyses the link between human capital and regional economic growth in the European Union. Using various indicators of human capital calculated from census microdata, we conclude that the recent economic performance of European regions is associated with an increase in overeducation. In fact, measures of educational mismatch seem to be more strongly connected to regional economic performance than do other traditional measures of human capital stock.
    Keywords: regional economic growth, human capital, educational mismatch, overeducation
    JEL: O18 O47 R23
    Date: 2009–09
  18. By: Bernard Franck (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes I - Université de Caen); Robert F. Owen (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272)
    Abstract: A two-country, two-period model of international migration highlights microeconomic foundations for examining the interrelation between brain drain, brain gain and the location of human capital formation, at home or abroad. Ex ante choices regarding where to study depend on relative qualities of university systems, individuals' abilities, sunk educational investment costs, government grants, and expected employment prospects in both countries. The analysis underscores an inherently widerange of conceivable positive or negative effects on domestic net welfare. These changes depend critically on the foregoing factors, as well as the optimal design of educational grant schemes, given eventual informational imperfections regarding individuals' capabilities.
    Date: 2009–10–01
  19. By: Jellal, Mohamed
    Abstract: One considers a model of accumulation of the human capital in the presence of the international migration offers. One shows that under certain conditions,this option can support the increase in the stock of the national human capital by taking of account the externalities. Thus the `brain drain' would have a positive impact on the national economy under a well controlled restrictive migratory policy. The difficulty of this control scheme leads us to propose an alternative model suggesting the internalisation of the human capital externalities thus allowing the implementation of the social optimum. The mechanism of this internalisation is based on the endogenous creation of cultural norm with the accumulation of the knowledge. This social norm avoids the risks of conditionalities inherent in a migratory policy as a mechanism of internalisation of the externalities of the human capital.
    Keywords: Human capital Formation; Brain Gain; Social Norm ; Diaspora Formation
    JEL: F22 I21 J24 Z13 F43
    Date: 2009–10–08
  20. By: Holmlund, Linda (Department of Economics, Umeå University)
    Abstract: This paper examines the effect of college quality on earnings using administrative data on Swedish college students. To consider possible heterogeneity, the effects for men and women are estimated separately and quantile regression is used to determine whether the effect of college quality differs over the income distribution. The overall results suggest that the link between college quality and earnings is weak in Sweden. A small positive effect is found for individuals that are likely to work full time as well as for individuals in the upper part of the income distribution, while negative effects are found for individuals located in the middle and lower parts of the income distribution. Furthermore, controlling for region of work affects the estimated effects, indicating a correlation between choice of college quality and choice of labor market region.
    Keywords: College quality; Earnings; Selection on observables
    JEL: I21 J31
    Date: 2009–10–02
  21. By: M. Niaz Asadullah; Uma Kambhampati; Florencia Lopez Boo
    Abstract: This study documents the size and nature of “boy-girl” and “Hindu-Muslim” gaps in children’s school participation and attainments in India. Individual-level data from two successive rounds of the National Sample Survey suggest that considerable progress has been made in decreasing the Hindu-Muslim gap. Nonetheless, the gap remains sizable even after controlling for numerous socioeconomic and parental covariates, and the Muslim educational disadvantage in India today is greater than that experienced by girls and Scheduled Caste Hindu children. A gender gap still appears within as well as between communities, though it is smaller within Muslim communities. While differences in gender and other demographic and socio-economic covariates have recently become more important in explaining the Hindu-Muslim gap, those differences altogether explain only 25 percent to 45 percent of the observed schooling gap.
    Keywords: gender inequality, India, religion, social disparity
    JEL: I21 J16 Z12
    Date: 2009–08
  22. By: Matthias Cinyabuguma (UMBC); Bill Lord (UMBC); Christelle Viauroux (UMBC)
    Abstract: Between the latter nineteenth century and the 1930s there was a dramatic revolution in American families. Family size continued its long-term decline, the schooling of older children expanded and the proportion of married females' adulthood devoted to market-oriented activities increased. Over this same period there were significant reductions in mortality, especially among the young, and impressive reductions in morbidity. This paper considers all these trends jointly, modeling the changes in fertility, child schooling and lifetime married female labor supply as a consequence of exogenous changes in health. These interactions are then quantified using calibration techniques. The simulations suggest that reductions in child mortality alone cannot explain the transformation of the American family. Indeed, in our preferred calibration, reductions in child mortality lead to a modest decline in human capital and increase in fertility, with little effect on married female labor force involvement. In sharp contrast, reductions in morbidity are found to lower fertility and increase education. The time savings from lower fertility more than offset the increased time mothers invest in their childrens' quality, freeing some time for market work. Nevertheless, to quantitatively account for the increase in mother's time spent at work it proves necessary to generate further reductions in mother's household production time. In our framework this is driven by a narrowing of the gender wage gap. More generally, viewing the implications of health improvements deepens our understanding of the American family transformation, complementing explanations based on narrowing of the gender wage gap, skill biased technical change and changes in household technology.
    Keywords: Schooling, Fertility, Health, Human Capital Accumulation, Labor Supply
    JEL: D1 J13 I21 I10 J24 J22 N3
    Date: 2009–09–11

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