nep-edu New Economics Papers
on Education
Issue of 2012‒09‒09
five papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Risks and Returns to Educational Fields: A Financial Asset Approach to Vocational and Academic Education By Daniela Glocker; Johanna Storck
  2. Estimating the External Returns to Education: Evidence from China By Wen Fan; Yuanyuan Ma
  3. The returns to education for opportunity entrepreneurs, necessity entrepreneurs, and paid employees By Fossen, Frank M.; Büttner, Tobias J. M.
  4. Young immigrant children and their educational attainment By Asako Ohinata; Jan C. van Ours
  5. Decentralization of Health and Education in Developing Countries: A Quality-Adjusted Review of the Empirical Literature By Anila Channa; Jean-Paul Faguet

  1. By: Daniela Glocker; Johanna Storck
    Abstract: Applying a financial assets approach, we analyze the returns and earnings risk of investments into different types of human capital. Even though the returns from investing in human capital are extensively studied, little is known about the properties of the returns to different types of human capital within a given educational path. Using information from the German Micro Census, we estimate the risk and returns to around 70 fields of education and differentiate between vocational and academic education. We identify fields of education that are efficient investment goods, i.e. high returns at a given level of risk, and fields that are chosen for other (non-monetary) reasons. Furthermore, we rank fields of education by their return per unit of risk and find that university education is not always superior to other educational paths.
    Keywords: Educational choice, human capital investment, returns to schooling, mean-variance analysis
    JEL: I21 J24
    Date: 2012
  2. By: Wen Fan (University College Dublin); Yuanyuan Ma (University College Dublin)
    Abstract: Good understanding on the human capital externalities is important for both policy makers and social science researchers. Economists have speculated for at least a century that the social returns to education may exceed the private returns. In this paper, using the longitudinal data from China Health and Nutrition Survey (CHNS), we examine how individual wage changes associated with the share of college graduates in the same province across years for a person who has never moved by implementing individual fixed effects estimates. The individual fixed effect model shows that the external returns to education in China appear to be negative and on the order of -2%, which might be biased by potential endogeneity. Concerned with this problem, we then implement the IV fixed effect estimates and find positive external returns to education at about 10%. We also find this returns differ across individual heterogeneity.
    Keywords: Education, Externalities, Spillover, Signalling, China
    JEL: J0 J24 O15
    Date: 2012–08–29
  3. By: Fossen, Frank M.; Büttner, Tobias J. M.
    Abstract: We assess the relevance of formal education for the productivity of the self-employed and distinguish between opportunity entrepreneurs, who voluntarily pursue a business opportunity, and necessity entrepreneurs, who lack alternative employment options. We expect differences in the returns to education between these groups because of different levels of control. We use the German Socio-economic Panel and account for the endogeneity of education and non-random selection. The results indicate that the returns to a year of education for opportunity entrepreneurs are 3.5 percentage points higher than the paid employees' rate of 8.1%, but 6.5 percentage points lower for necessity entrepreneurs. --
    Keywords: returns to education,opportunity,necessity,entrepreneurship
    JEL: J23 J24 J31 I20 L26
    Date: 2012
  4. By: Asako Ohinata (Department of Economics and CentER, Tilburg University); Jan C. van Ours (Department of Economics, CentER, Tilburg University; University of Melbourne; CESifo; CEPR and IZA)
    Abstract: We analyze the determinants of reading literacy, mathematical skills and science skills of young immigrant children in the Netherlands. We find that these are affected by age at immigration and whether or not one of the parents is native Dutch.
    Keywords: Immigrant children, Educational attainment
    JEL: I21 J15
    Date: 2012–08
  5. By: Anila Channa; Jean-Paul Faguet
    Abstract: We review empirical evidence on the ability of decentralization to enhance preference matching and technical efficiency in the provision of health and education in developing countries. Many influential surveys have found that the empirical evidence of decentralization's effects on service delivery is weak, incomplete and often contradictory. Our own unweighted reading of the literature concurs. But when we organize the evidence first by substantive theme, and then - crucially - by empirical quality and the credibility of its identification strategy, clear patterns emerge. Higher quality evidence indicates that decentralization increases technical efficiency across a variety of public services, from student test scores to infant mortality rates. Decentralization also improves preference matching in education, and can do so in health under certain conditions, although there is less evidence for both. We discuss individual studies in some detail. Weighting by quality is especially important when evidence informs policy-making. Firmer conclusions will require an increased focus on research design, and a deeper examination into the prerequisites and mechanisms of successful reforms.
    Keywords: Decentralization, School-Based Management, Education, Health, Service Delivery, Developing Countries, Preference Matching, Technical Efficiency
    Date: 2012–07

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