nep-edu New Economics Papers
on Education
Issue of 2010‒12‒11
eight papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Estimating the Cream Skimming Effect of School Choice By Joseph G. Altonji; Ching-I Huang; Christopher R. Taber
  2. What factors determine student performance in East Asia? New evidence from TIMSS 2007 By Hojo, Masakazu; Oshio, Takashi
  3. Universities as Stakeholders in their Students' Careers: On the Benefits of Graduate Taxes to Finance Higher Education By McKenzie, Tom; Sliwka, Dirk
  4. Competition, wages and teacher sorting: four lessons learned from a voucher reform By Hensvik, Lena
  5. The Distributional Effects of Direct College Costs By Gemus, Jonathan
  6. College Achievement and Earnings By Gemus, Jonathan
  7. Drivers of Academic Research and Patenting in India: Econometric Estimation of the Research Production Function By Amit Shovon Ray; Sabyasachi Saha
  8. Occupational choice of young graduates: Do job tasks matter? By Rocher S.

  1. By: Joseph G. Altonji; Ching-I Huang; Christopher R. Taber
    Abstract: We develop a framework that may be used to determine the degree to which a school choice program may harm public school stayers by luring the best students to other schools. This framework results in a simple formula showing that the “cream-skimming” effect is increasing in the degree of heterogeneity within schools, the school choice takeup rate of strong students relative to weak students, and the importance of peers. We use the formula to investigate the effects of a voucher program on the high school graduation rate of the students who would remain in public school. We employ NELS:88 data to measure the characteristics of public school students, to estimate a model of the private school entrance decision, and to estimate peer group effects on graduation. We supplement the econometric estimates with a wide range of alternative assumptions about school choice and peer effects. We find that the cream skimming effect is negative but small and that this result is robust across our specifications.
    JEL: I21
    Date: 2010–12
  2. By: Hojo, Masakazu; Oshio, Takashi
    Abstract: This study investigates what factors determine students’ academic performance in five major economies in East Asia, using the dataset from the 2007 survey of Trends in International Mathematics and Science Study (TIMSS). We explicitly consider initial maturity differences, endogeneity of class size, and peer effects in regression analysis. We find that a student’s individual and family background is a key determinant of educational performance, while institutional and resource variables have a more limited effect. Peer effects are significant in general, but ability sorting at the school and/or class levels makes it difficult to interpret them in Hong Kong and Singapore.
    Keywords: Educational production function, Initial maturity differences, Peer effects, Class size, Asia
    JEL: I21 I22
    Date: 2010–12
  3. By: McKenzie, Tom (City University London); Sliwka, Dirk (University of Cologne)
    Abstract: We examine ways of funding higher education, comparing upfront tuition fees with graduate taxes. The tax dominates, as volatility in future income is transferred from risk-averse students to the risk-neutral state. However, a double moral hazard problem arises when students’ efforts to raise lifetime income and universities’ activities to improve teaching quality are endogenized. We show that graduate taxes reduce work incentives but provide incentives to improve teaching quality. Yet if tax revenues are distributed evenly among universities there is free riding. To solve this problem each university should be allocated the revenue generated by its own alumni. In addition, we demonstrate how a budget-balancing graduate tax would encourage more people to attend university than would the equivalent upfront tuition fee.
    Keywords: higher education, graduate tax, tuition fees, risk aversion, incentives
    JEL: H42 H52 I22 M52
    Date: 2010–11
  4. By: Hensvik, Lena (Uppsala Center for Labor Studies)
    Abstract: This paper studies how local school competition affects teacher wages at markets where wages are set via individual wage bargaining. Using regional variation in private school entry generated by a Swedish reform which allowed private schools to enter freely and a comprehensive matched employer employee data covering all high school teachers in Sweden over 16 years, I analyze the effects of competition on wages as well as labor flows. The results suggest that competition translates into higher wages, also for teachers in public schools. While the average increases are modest new teachers gain 2 percent and high ability teachers in math and science receive 4 percent higher wages in the most competitive areas compared to areas without any competition from private schools. Several robustness checks support a causal interpretation of the results which together highlight the potential gains from school competition through a more differentiated wage setting of teachers.
    Keywords: private school competition; teacher wages; monopsony power
    JEL: J24 J31 J42
    Date: 2010–06–07
  5. By: Gemus, Jonathan (Uppsala Center for Labor Studies)
    Abstract: This paper examines the distributional impacts of direct college costs { that is, whether the response of educational decisions to college costs varies by student characteristics. The primary obstacle in estimating these eects is the endogeneity of schooling costs. To overcome this issue, I use two measures of direct costs that are plausibly exogenous: living within commuting distance to a university and the elimination of the Social Security Student Bene t Program in the United States. Both sources of variation indicate that lower ability students are the most responsive to changes in college costs. In contrast, I nd that the eect of both cost measures on college attendance and graduation does not substantially vary by family income, parent education, race or gender.
    Keywords: Schooling Costs; Educational Attainment; Financial Aid Policy
    JEL: I20 I28 J24
    Date: 2010–10–31
  6. By: Gemus, Jonathan (Uppsala Center for Labor Studies)
    Abstract: I study the size and sources of the monetary return to college achievement as measured by cumulative Grade Point Average (GPA). I rst present evidence that the return to achievement is large and statistically signi cant. I nd, however, that this masks variation in the return across dierent groups of people. In particular, there is no relationship between GPA and earnings for graduate degree holders but a large and positive relationship for people without a graduate degree. To reconcile these results, I develop a model where students of diering and initially uncertain ability levels choose eort level in college and whether to earn a graduate degree. College achievement and graduate attainment are allowed to increase human capital and be used by employers to screen workers. In the separating equilibrium studied, workers who earn a graduate degree can eectively signal high productivity to employers. As a result, employers use undergraduate GPA-a noisy signal of productivity-to screen only the workers who do not hold a graduate degree. Viewing the empirical results through the lens of this equilibrium, the zero GPA-earnings relationship for graduate degree holders and the positive and large relationship for people without a graduate degree suggests that most of the return to achievement net of graduate educational attainment is driven by sorting.
    Keywords: keywords are Schooling Costs; Educational Attainment; Financial Aid Policies
    JEL: I20 I28 J24
    Date: 2010–01–04
  7. By: Amit Shovon Ray; Sabyasachi Saha (Indian Council for Research on International Economic Relations)
    Abstract: In this paper we attempt to provide a comprehensive understanding of the drivers of academic research and patenting in India. Academic research is conceptualised as a research production process where research inputs (like research time and number of research scholars) are transformed into research outputs in the form of publications and patents. We expect research inputs by a faculty member to be an outcome of his/her own decision-making process, which in turn determine his/her research outputs. Exogenous parameters, like faculty background, faculty attitude, research sponsorship and institutional factors, are expected to influence both set of endogenous variables (research inputs and outputs). We specify this production function as a recursive simultaneous equation model and estimate the structural parameters using standard econometric methods. Our results clearly identify several drivers of academic research and patenting in India, in terms of faculty background, faculty attitude and other parameters, from which we arrive at concrete policy lessons for patenting of academic research in India. In particular, we argue that putting in place institutional structures will not serve the purpose without addressing the fundamental issues of research environment, culture and attitude in the first place. In a sense, therefore, introducing an IPR legislation alone may not act as an instant magic formula to energise Indian academic research for commercial application.
    Keywords: Academic Research, Patents, Bayh-Dole Act, India
    JEL: O31 O34 O38 I23 C51
    Date: 2010
  8. By: Rocher S.
    Abstract: This paper examines the extent to which graduates of higher education direct their own occupational choices. I begin by developing an empirical indicator to identify the relation between occupations based on their task content. To this end, I combine individual education and employment data of UK graduates with ratings on 42 task content areas from the UK Skill Survey. Based on these data, I show that UK graduates who majored in similar ?fields choose occupations with similar task packages. This is followed by a discussion of the wage implications of entering an atypical occupation relative to the modal graduate from the same fi?eld. As such, the indicator can be interpreted within a mismatch context. I fi?nd that task mismatch increases the probability of over-quali?cation, which is subsequently associated with lower wages.
    Date: 2010–11

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