nep-edu New Economics Papers
on Education
Issue of 2009‒10‒31
thirteen papers chosen by
Joao Carlos Correia Leitao
Polytechnic Institute of Portalegre and Technical University of Lisbon

  1. The Impact of Parental Education on Earnings: New Wine in an Old Bottle? By Hudson, John; Sessions, John
  2. Blind Admission? The ability of NSC maths to signal competence in university commerce courses as compared to the former SC Higher Grade maths By Hunt, Karin; Rankin, Neil A.; Schöer, Volker; Nthuli, Miracle; Sebastiao, Claire
  3. Early tracking and the misfortune of being young By Nicole Schneeweis; Martina Zweimüller
  4. Evaluating the effects of decentralization on educational outcomes in Spain? By Paula Salinas; Albert Solé-Ollé
  5. An Arrested Virtuous Circle? Higher Education And High-Tech Industries In India By Rakesh Basant,Partha Mukhopadhyay
  6. The Changing Selectivity of American Colleges By Caroline M. Hoxby
  7. EAST AND WEST, THE TWAIN SHALL MEET:A Cross-cultural Perspective on Higher Education By Tejas A. Desai
  8. Distribution of Demand for School Quality: Evidence from Quantile Regression By Wada, Roy; Herbert, Zahirovic-Herbert
  9. Brain Drain and Brain Return: Theory and Application to Eastern-Western Europe By Karin Mayr; Giovanni Peri
  10. Cheaper By the Dozen: Using Sibling Discounts at Catholic Schools to Estimate the Price Elasticity of Private School Attendance By Susan Dynarski; Jonathan Gruber; Danielle Li
  11. The determinants of university patenting: Do incentives matter? By Tomás del Barrio-Castro; José García-Quevedo
  12. Grade retention and educational attainment. Exploiting the 2001 Reform by the French-Speaking Community of Belgium and Synthetic Control Methods By Michle BELOT; Vincent VANDENBERGHE
  13. Education and Entrepreneurial Choice: An Instrumental Variables Analysis By Jörn H. Block; Lennart Hoogerheide; Roy Thurik

  1. By: Hudson, John; Sessions, John
    Abstract: We examine the impact of parental education on the shape of an individual’s experience-earnings profile. A number of factors suggest that parental education will affect the ability of an individual to translate labor market experience into earnings. Our empirical analysis of US data suggests that this is indeed the case. Higher parental education shifts the earnings profile significantly to the left – the profile of individuals with parents who both have 15 years of education peaks at 16 years of experience when their wages are 52% (24%) greater than those whose parents both have only 5 (10) years of education.
    Keywords: Parental education; human capital; earnings
    Date: 2009–05
  2. By: Hunt, Karin; Rankin, Neil A.; Schöer, Volker; Nthuli, Miracle; Sebastiao, Claire
    Abstract: Mathematics is an important signal used for admission into commerce courses in South African universities. In 2008 the new National Senior Certificate replaced the former Senior Certificate. This new exam no longer had different grades and thus created a structural break in the ability of the mathematics mark to signal preparedness for university. Although the Department of Education provided a “translation” key between the two Certificates, the University of the Witwatersrand (and other universities) admitted many more students in 2009 that met the entry requirements than previously. However, this cohort has lower average test and exam scores than previous years. This suggests that marks obtained for mathematics in the new National Senior Certificate are inflated when compared to the former Senior Certificate. This paper uses similar tests, for two commerce subjects, written by students in 2008 and 2009 to create a comparison between the mathematics marks under the two different certificates. The results suggest that marks in the range of 40-100% for Higher Grade mathematics for the Senior Certificate are now compressed into the 70-95% range for the new National Senior Certificate. This significantly weakens the ability of the school-leaving mathematics mark to signal the ability of students to cope with first year commerce courses.
    Keywords: Mathematics; National Senior Certificate; Economics 1; first year; Commerce courses; South Africa
    JEL: A22 A20
    Date: 2009–10–22
  3. By: Nicole Schneeweis; Martina Zweimüller
    Abstract: In the Austrian (as well as the German) education system students have to choose between different school tracks at the age of 10. We argue that early tracking creates inefficiencies because the earlier the track choice has to be made, the more it is influenced by factors other than innate ability. Recent evidence suggests that the relative age of a student within a grade is related to his or her achievement, and that this effect is decreasing over grades. Thus, age-related achievement differences probably translate into age-related differences in track choice if track choice has to be made early. In this paper we estimate the effect of observed age on the track choice after grade 4 using register data for a major Austrian city for the period 1984-2006. Since observed age at track choice is endogenous, we exploit the exogenous variation in birth month to identify the causal effect of age. We find a strong and significant positive effect of age on track choice in grades 5-8. Since after grade 8, students again have to make a track choice, we use additional data from PISA 2003 and 2006 to show that the effect is long-lasting in urban areas. Therefore, the education system fails to provide a mechanism that leads to an efficient allocation of students to tracks.
    Keywords: Early tracking, school choice, age effect, instrumental variables, birth month
    JEL: I21 I28
    Date: 2009–10
  4. By: Paula Salinas (Universitat de Barcelona); Albert Solé-Ollé (Universitat de Barcelona)
    Abstract: Several arguments derived from fiscal federalism theory suggest that decentralization may lead to improved levels of efficiency in the provision of public goods and services. The aim of this study is to examine this hypothesis by evaluating the effects of decentralization on educational outcomes in Spain. These are measured using a survival rate, defined as the ratio between the number of students who enrolled in upper-secondary (non-compulsory) education and the number of students enrolled in the final year of lower-secondary (compulsory) education during the previous academic year. We use a panel data set comprising the 50 provinces of Spain for the years 1978 to 2005, a period that covers the entire process of decentralization. Since education competences were devolved to the regions at different points in time, we can estimate the effects of these reforms by applying the differences-in-differences method and by using the non-decentralized autonomous regions as the comparison group. We find that decentralization in Spain had a positive impact on educational outcomes when pupils on vocational training programmes are not taken into account, and that the richer the region is the more marked the effect becomes. However, this improvement in educational outcomes is achieved at the expense of enrolment in vocational training programmes. These effects might reflect a better match between population preferences and educational policies consequent upon decentralization.
    Keywords: Decentralization, Policy Evaluation, Education
    JEL: H11 H43 H52 I28
    Date: 2009
  5. By: Rakesh Basant,Partha Mukhopadhyay
    Abstract: We provide a brief but comprehensive overview of linkages between higher education and the high tech sector and study the major linkages in India. We find that the links outside of the labor market are weak. This is attributed to a regulatory structure that separates research from the university and discourages good faculty from joining, which erodes the quality of the intellectual capital necessary to generate new knowledge. In the labor market, we find a robust link between higher education and high-tech industry, but despite a strong private sector supply response to the growth of the high-tech industry, the quality leaves much to be desired. Poor university governance may be limiting both labor market and non-labor market linkages. Industry efforts to improve the quality of graduates are promising but over reliance on industry risks compromising workforce flexibility. Addressing the governance failures in higher education is necessary to strengthen the links between higher education and high tech industry.
    Date: 2009–05–05
  6. By: Caroline M. Hoxby
    Abstract: This paper shows that although the top ten percent of colleges are substantially more selective now than they were 5 decades ago, most colleges are not more selective. Moreover, at least 50 percent of colleges are substantially less selective now than they were then. This paper demonstrates that competition for space--the number of students who wish to attend college growing faster than the number of spaces available--does not explain changing selectivity. The explanation is, instead, that the elasticity of a student's preference for a college with respect to its proximity to his home has fallen substantially over time and there has been a corresponding increase in the elasticity of his preference for a college with respect to its resources and peers. In other words, students used to attend a local college regardless of their abilities and its characteristics. Now, their choices are driven far less by distance and far more by a college's resources and student body. It is the consequent re-sorting of students among colleges that has, at once, caused selectivity to rise in a small number of colleges while simultaneously causing it to fall in other colleges. I show that the integration of the market for college education has had profound implications on the peers whom college students experience, the resources invested in their education, the tuition they pay, and the subsidies they enjoy. An important finding is that, even though tuition has been rising rapidly at the most selective schools, the deal students get there has arguably improved greatly. The result is that the "stakes" associated with admission to these colleges are much higher now than in the past.
    JEL: H75 I2 J24
    Date: 2009–10
  7. By: Tejas A. Desai
    Abstract: Both India and the U.S. were once colonies of Great Britain, the world''s first but short-lived global power. And both India and the U.S. ultimately threw off the imperialist yoke. Despite independence, both democracies inherited certain things from Great Britain. Whereas India inherited the English language, parliamentary governance, socialism, and, last but not least, the English educational system; the U.S. inherited the English language, the Judeo-Christian value system, and the .white. racial identity. The English educational system of India was augmented by Soviet-style central planning which resulted in several .Institutes. that have come to dominate higher education in India. Despite being ethnically closer to Great Britain, the U.S. evolved its own system of political governance, and, more important, its own educational system. While American higher education has come to define the .gold standard. for higher education, India still lags considerably behind in higher education. This paper seeks to explain certain cultural differences that may have contributed to this imbalance between the Indian and American higher education systems.
    Date: 2009–04–24
  8. By: Wada, Roy; Herbert, Zahirovic-Herbert
    Abstract: Our results show that high-income families place significantly higher value on academic achievement than low-income families. High-income families are also more likely to penalize house price for non-desirable non-academic school quality. This paper uses quantile regression to examine the distribution of demand for school quality. For academic achievement, the average effects as estimated by OLS are biased toward zero due to “aggregation” of families’ willingness to pay. We take advantage of a court-ordered redistricting as a quasi-random assignment of school quality. Subdivision and school fixed-effects are used to control for unobserved characteristics.
    Keywords: school quality; demand; house price; quantile regression; hedonic equation
    JEL: I2 R2 D1 D4 R5
    Date: 2009–10
  9. By: Karin Mayr; Giovanni Peri (Department of Economics, University of California, Davis, USA)
    Abstract: Recent empirical evidence seems to show that temporary migration is a widespread phenomenon, espe- cially among highly skilled workers who return to their countries of origin when these begin to grow. This paper develops a simple, tractable overlapping generations model that provides a rationale for return migra- tion and predicts who will migrate and who returns among agents with heterogeneous abilities. The model also incorporates the interaction between the migration decision and schooling: the possibility of migrating, albeit temporarily, to a country with high returns to skills produces positive schooling incentive effects. We use parameter values from the literature and data on return migration to simulate the model for the Eastern-Western European case. We then quantify the effects that increased openness (to migrants) would have on human capital and wages in Eastern Europe. We find that, for plausible values of the parameters, the possibility of return migration combined with the education incentive channel reverses the brain drain into a significant brain gain for Eastern Europe.
    Keywords: Skilled Migration, Return Migration, Returns to Education, Eastern-Western Europe
    JEL: F22 J61 O15
    Date: 2009–10
  10. By: Susan Dynarski; Jonathan Gruber; Danielle Li
    Abstract: The effect of vouchers on sorting between private and public schools depends upon the price elasticity of demand for private schooling. Estimating this elasticity is empirically challenging because prices and quantities are jointly determined in the market for private schooling. We exploit a unique and previously undocumented source of variation in private school tuition to estimate this key parameter. A majority of Catholic elementary schools offer discounts to families that enroll more than one child in the school in a given year. Catholic school tuition costs therefore depend upon the interaction of the number and spacing of a family’s children with the pricing policies of the local school. This within-neighborhood variation in tuition prices allows us to control for unobserved determinants of demand with a set fine geographic group fixed effects while still identifying the price parameter. We analyze this variation by using data on over 3700 school tuition schedules collected from Catholic schools around the nation, matched to restricted Census data that identifies precise location that can be matched to the nearest Catholic school. We find that a standard deviation decrease in tuition prices increases the probability that a family will send its children to private school by one half percentage point, which translates into an elasticity of Catholic school attendance with respect to tuition costs of -0.19. Our subgroup results suggest that a voucher program would disproportionately induce into private schools those who, along observable dimensions, are unlike those who currently attend private school.
    JEL: I20 I28
    Date: 2009–10
  11. By: Tomás del Barrio-Castro (University of the Balearic Islands); José García-Quevedo (University of Barcelona)
    Abstract: In recent years various studies have examined the factors that may explain academic patents. Existing analyses have also underlined the substantial differences to be found in European countries in the institutional framework that defines property rights for academic patents. The objective of this study is to contribute to the empirical literature on the factors explaining academic patents and to determine whether the incentives that universities offer researchers contribute towards explaining the differences in academic patenting activity. The results of the econometric analysis for the Spanish universities point towards the conclusion that the principal factor determining the patents is funding of R&D while royalty incentives to researchers do not appear to be significant.
    Keywords: patents, university, R&D
    JEL: O34 O31
    Date: 2009
  12. By: Michle BELOT (OXFORD UNIVERSITY, Nuffield Centre for Experimental Social Sciences (CESS), Nuffield College); Vincent VANDENBERGHE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: This paper evaluates the effects of grade retention on attainment by exploiting a reform introduced in 2001 in the French-Speaking Community of Belgium whereby the possibility of grade retention in grade 7 was reintroduced. It uses the Synthetic Control Method to identify the best possible pre-treatment control. Data come from three waves of the PISA study (corresponding to periods before and after the reform) that contains test scores of representative samples of 15 year-olds. These are used essentially to answer two questions. First, has the 2001 grade repetition reform at least succeeded at filtering out weaker pupils, pupils who would presumably be disadvantaged by being promoted directly to higher grades. This is a minimum condition for grade retention to be justifiable. Second, do these ÒtreatedÓ students achieve better/worse when they repeat (and attend a lower grade) than when they are Òsocially promotedÓ. (and attend the age 15 reference grade 10)? We find significant evidence of positive screening but we fail to demonstrate that those filtered out perform differently under the Ògrade repetitionÓ.regime than under the Òsocial promotionÓregime.
    Keywords: Grade retention, educational attainment, synthetic control method
    JEL: I20 I28 H52
    Date: 2009–08–17
  13. By: Jörn H. Block (Erasmus University Rotterdam, Technische Universität München); Lennart Hoogerheide (Erasmus University Rotterdam); Roy Thurik (Erasmus University Rotterdam, EIM Business and Policy Research, Zoetermeer, Max Planck Institute of Economics, Jena)
    Abstract: Education is argued to be an important driver of the decision to start a business. The measurement of its influence, however, is difficult since it is considered to be an endogenous variable. This study is the first to account for this endogeneity by using an instrumental variables approach. The effect of education on the decision to become self-employed is found to be strongly positive, much higher than the estimated effect in case no instrumental variables are used. That is, the higher the respondent's level of education, the greater the likelihood that he or she starts a business. Implications for method and practice are discussed.
    Keywords: Occupational choice; entrepreneurial choice; education; self-employment; endogeneity; instrumental variables; entrepreneurship
    JEL: C35 I20 J24 L26
    Date: 2009–10–13

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