nep-edu New Economics Papers
on Education
Issue of 2009‒12‒11
seven papers chosen by
Joao Carlos Correia Leitao
Polytechnic Institute of Portalegre and Technical University of Lisbon

  1. Why Have College Completion Rates Declined? An Analysis of Changing Student Preparation and Collegiate Resources By John Bound; Michael Lovenheim; Sarah Turner
  2. Public Infrastructure, Location of Private Schools and Primary School Attainment in an Emerging Economy By Pal, Sarmistha
  3. Income contingent tuition fees for universities By Neil Shephard
  4. How Consistent Are Class Size Effects? By Konstantopoulos, Spyros
  5. Inference on a Generalized Roy Model, with an Application to Schooling Decisions in France By d'Haultfoeuille, Xavier; Maurel, Arnaud
  6. Higher Education Policy in Greece: Filling the Danaids' Jar By Elias Katsikas; Theologos Dergiades
  7. Do Better Schools Lead to More Growth? Cognitive Skills, Economic Outcomes, and Causation By Hanushek, Eric A.; Woessmann, Ludger

  1. By: John Bound; Michael Lovenheim; Sarah Turner
    Abstract: Partly as a consequence of the substantial increase in the college wage premium since 1980, a much higher fraction of high school graduates enter college today than they did a quarter century ago. However, the rise in the fraction of high school graduates attending college has not been met by a proportional increase in the fraction who finish. Comparing two cohorts from the high school classes of 1972 and 1992, we show eight-year college completion rates declined nationally, and this decline is most pronounced amongst men beginning college at less-selective public 4-year schools and amongst students starting at community colleges. We decompose the observed changes in completion rates into the component due to changes in the preparedness of entering students and the component due to collegiate characteristics, including type of institution and resources per student. We find that, while both factors play a role, it is the collegiate characteristics that are more important. A central contribution of this analysis is to show the importance of the supply-side of the higher education in explaining changes in college completion.
    JEL: I2 I23
    Date: 2009–12
  2. By: Pal, Sarmistha (Brunel University)
    Abstract: The paper argues that access to public infrastructure plays a crucial role on the presence of private schools in a community, as it could not only minimise the cost of production, but also ensure a high return to private investment. Results using community, school and child/household-level PROBE survey data from five north Indian states provide some support to this central hypothesis: even after controlling for all other factors, access to village infrastructural facilities is associated with a higher likelihood of having a private school in the community. This is also corroborated by an analysis of household demand for private schools. The paper concludes by examining the effect of private school presence on year 5 pass rates: while all-school pass rates are significantly higher in villages with a private school, private school presence fails to have significant effect on local state school pass rates.
    Keywords: school privatisation, school choice, school attainment, local public infrastructure, failing state schools, simultaneity bias, instrumental variable
    JEL: I20 I30 O15 P36
    Date: 2009–11
  3. By: Neil Shephard (Oxford-Man Institute and Department of Economics, University of Oxford, Oxford)
    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 position 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: 2009–10–04
  4. By: Konstantopoulos, Spyros (Michigan State University)
    Abstract: Evidence from Project STAR has suggested that on average small classes increase student achievement. However, thus far researchers have focused on computing mean differences in student achievement between smaller and larger classes. In this study I focus on the distribution of the small class effects at the school level and compute the inconsistency of the treatment effects across schools. I use data from Project STAR and estimated small class effects for each school on mathematics and reading scores from kindergarten through third grade. The results revealed that school-specific small class effects are both positive and negative and that although students benefit considerably from being in small classes in some schools, in other schools being in small classes is a disadvantage. Small class effects were inconsistent and varied significantly across schools. Full time teacher aide effects were also inconsistent across schools and in some schools students benefit considerably from being in regular classes with a full time aide, while in other schools being in these classes is a disadvantage.
    Keywords: small classes, treatment variability, meta-analysis
    JEL: I20
    Date: 2009–11
  5. By: d'Haultfoeuille, Xavier (CREST-INSEE); Maurel, Arnaud (ENSAE-CREST)
    Abstract: This paper considers the identification and estimation of an extension of Roy's model (1951) of occupational choice, which includes a non-pecuniary component in the decision equation and allows for uncertainty on the potential outcomes. This framework is well suited to various economic contexts, including educational and sectoral choices, or migration decisions. We focus in particular on the identification of the non-pecuniary component under the condition that at least one variable affects the selection probability only through potential earnings, that is under the opposite of the usual exclusion restrictions used to identify switching regressions models and treatment effects. Point identification is achieved if such variables are continuous, while bounds are obtained otherwise. As a result, the distribution of the ex ante treatment effects can be point or set identified without any usual instruments. We propose a three-stages semiparametric estimation procedure for this model, which yields root-n consistent and asymptotically normal estimators. We apply our results to the educational context, by providing new evidence from French data that non-pecuniary factors are a key determinant of higher education attendance decisions.
    Keywords: Roy model, nonparametric identification, exclusion restrictions, schooling choices, ex ante returns to schooling
    JEL: C14 C25 J24
    Date: 2009–12
  6. By: Elias Katsikas (Department of Economics, University of Macedonia); Theologos Dergiades (Department of Economics, University of Macedonia)
    Abstract: The study examines the potential effects of a recent policy change in Greece on students’ graduation rates. Our study mainly concentrates on the impact that the reform may have on the various categories of students, as these are classified by the way they enter the university. Individual records of 2,416 students studying at a university of economic and social studies are analyzed by means of the probit model. Our empirical findings suggest that students from all the other modes of entry, compared to students entering by means of general examinations, face a considerably higher probability of failure. Among the rest of the results, the most interesting one concerns the equal likelihood of failure of students with different socio-economic backgrounds.
    Keywords: policy change; mode of university entry; graduation rate; duration of studies.
    JEL: I21 I23 I28
    Date: 2009–11
  7. By: Hanushek, Eric A. (Stanford University); Woessmann, Ludger (Ifo Institute for Economic Research)
    Abstract: We investigate whether a causal interpretation of the robust association between cognitive skills and economic growth is appropriate and whether cross-country evidence supports a case for the economic benefits of effective school policy. We develop a new common metric that allows tracking student achievement across countries, over time, and along the within-country distribution. Extensive sensitivity analyses of cross-country growth regressions generate remarkably stable results across specifications, time periods, and country samples. In addressing causality, we find, first, significant growth effects of cognitive skills when instrumented by institutional features of school systems. Second, home-country cognitive-skill levels strongly affect the earnings of immigrants on the U.S. labor market in a difference-in-differences model that compares home-educated to U.S.-educated immigrants from the same country of origin. Third, countries that improved their cognitive skills over time experienced relative increases in their growth paths. From a policy perspective, the shares of basic literates and high performers have independent significant effects on growth, and the estimates suggest that the high-performer effect is larger in poorer countries.
    Keywords: human capital, economic growth, cognitive skills
    JEL: H4 I2 J3 J61 O1 O4
    Date: 2009–11

This nep-edu issue is ©2009 by Joao Carlos Correia Leitao. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.