nep-edu New Economics Papers
on Education
Issue of 2014‒07‒13
twenty papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior and Universidade de Lisboa

  1. A Hybrid Approach to Estimating the Efficiency of Public Spending on Education in Emerging and Developing Economies By Francesco Grigoli
  2. Sweden's school choice reform and equality of opportunity By Edmark, Karin; Frölich, Markus; Wondratschek, Verena
  3. Capitalizing Performance of 'Free' Schools and the Difficulty of Reforming School Attendance Boundaries By John Gibson; Geua Boe-Gibson
  4. University Competition and Transnational Education: The Choice of Branch Campus By Joanna Poyago-Theotoky; Alessandro Tampieri
  5. Education private and social returns an optimal taxation policy By Jellal, Mohamed
  6. The Effect of Personality Traits on Subject Choice and Performance in High School: Evidence from an English Cohort By Mendolia, Silvia; Walker, Ian
  7. In 'Trusts' We Trust: Socially Motivated Private Schools in Nepal By Pal, Sarmistha; Saha, Bibhas
  8. Reaching High: Occupational Sorting and Higher Education Wage Inequality in the UK By Kleibrink, Jan; Michaelsen, Maren M.
  9. Education Policies and Taxation without Commitment By Findeisen, Sebastian; Sachs, Dominik
  10. Do Employers Prefer Workers Who Attend For-Profit Colleges? Evidence from a Field Experiment By Cory Koedel; Rajeev Darolia; Paco Martorell; Katie Wilson; Francisco Perez-Arce
  11. Project-based funding and novelty in university research: Findings from Finland and the UK By Pelkonen, Antti – Thomas
  12. Health Behaviors and Education in Turkey By Tansel, Aysit; Karaoglan, Deniz
  13. Can Improvements in Schools Spur Building Investments? Evidence from New York City By Keren Mertens Horn
  14. Bayesian Survival Modelling of University Outcomes By Vallejos, Catalina; Steel, Mark F. J.
  15. Educational Assortative Mating and Household Income Inequality By Lasse Eika; Magne Mogstad; Basit Zafar
  16. Transnational higher education by German universities: Main drivers and components By Fromm, Nadin
  17. Local Government Border Congruence and the Fiscal Commons : Evidence from Ohio School Districts By Joshua C. Hall
  18. Do firms benefit from university research? Evidence from Italy By Cardamone, Paola; Pupo, Valeria; Ricotta, Fernanda
  19. Why do we ignore risk in schooling decisions? By Hartog, Joop; Díaz Serrano, Lluís
  20. Do Choice Schools Break the Link Between Public Schools and Property Values? Evidence from House Prices in New York City By Amy Ellen Schwartz; Ioan Voicu; Keren Mertens Horn

  1. By: Francesco Grigoli
    Abstract: The measurement of the efficiency of public education expenditure using parametric and non-parametric methods has proven challenging. This paper seeks to overcome the difficulties of earlier studies by using a hybrid approach to measure the efficiency of secondary education spending in emerging and developing economies. The approach accounts for the impact of the level of development on education outcomes by constructing different efficiency frontiers for lower- and higher-income economies. We find evidence of large potential gains in enrollment rates by improving efficiency. These are largest in lower-income economies, especially in Africa. Reallocating expenditure to reduce student-to-teacher ratios (where these are high) and improving the quality of institutions (as measured by the "governance effectiveness" indicator in the World Bank's Governance Indicators database) could help improve the efficiency of education spending. Easing the access to education facilities and reducing income inequality (as measured by the Gini coefficient) could also help improve efficiency.
    Keywords: Government expenditures;Education;Africa;Emerging markets;Developing countries;Cross country analysis;education spending, educational outcomes, public education, public expenditure, education sector, school enrollment, education facilities, education outcomes, educational output, completion rates, access to education, educational efficiency, expenditure efficiency, schooling, education systems, efficiency of government expenditure, student educational outcomes, education indicators, public spending, school enrollments, health expenditure, returns to education, education services
    Date: 2014–01–30
  2. By: Edmark, Karin; Frölich, Markus; Wondratschek, Verena
    Abstract: This study analyses whether the Swedish school choice reform, enacted in 1992, had different effects on students from different socio-economic backgrounds. We use detailed geographical data on students' and schools' locations to construct measures of the degree of potential choice. This allows us to study the effects of choice opportunities among public schools, whereas previous studies have focused on newly opened private schools. Our results suggest small positive or no effects of choice opportunities, depending on specification and outcome. We find no strong evidence of differences between subgroups; if anything, effects tend to be slightly more positive for disadvantaged groups, such as students from low-income families. Taken together, the results indicate that students from a socio-economically disadvantaged or immigrant background were not harmed by the reform. --
    Keywords: school choice,school competition,treatment evaluation,cognitive and non-cognitive skills
    JEL: I24 C21
    Date: 2014
  3. By: John Gibson (University of Waikato); Geua Boe-Gibson (University of Waikato)
    Abstract: School attendance boundaries are a contentious issue in New Zealand, and have been relaxed and re-imposed depending upon political sentiment. Critics contend that a supposedly egalitarian state school system becomes one of selection by mortgage, with the value of ‘free’ schools capitalized into property prices. Attendance boundaries restrict the schooling opportunity set facing a student, who typically is unable to study at nearby high-performing schools if they live outside their boundary. We relate schooling opportunity sets to sales prices of over 8000 houses in Christchurch, controlling for dwelling attributes, neighborhood characteristics and geographic accessibility to a wide range of services. Our model explains over three-quarters of the variation in prices and we use this model to predict property prices if there were no attendance boundaries. Abolishing boundaries expands most schooling opportunity sets and predicted house prices generally rise. But prices would fall in some higher income neighborhoods with highly educated residents, who are likely to oppose reform of school attendance boundaries.
    Keywords: attendance boundaries; house prices; school quality
    JEL: C21 I20 R21
    Date: 2014–07–03
  4. By: Joanna Poyago-Theotoky (La Trobe University, Melbourne,); Alessandro Tampieri (CREA, University of Luxembourg)
    Abstract: We present a theoretical framework in which an elitist and a non- elitist university in a developed country compete by choosing their admission standards and deciding whether or not to open a branch campus in a developing country. Students from a developing country attend university either if a branch campus is opened or if they can afford to move to the developed country. We characterise the equi- libria by focussing on the relationship between the investment costs of a branch campus and the graduate wage. There are three type of equilibria: (i) no branch campus, (ii) only the elitist university opens a branch campus and (iii) both universities engage in transnational education, opening a branch campus. Very high investment costs dis- courage the opening of a branch campus. A rise in the graduate wage increases the incentive for opening a branch campus, although this incentive is stronger for the elitist than the non-elitist university. Sur- prisingly, a government subsidy for opening a branch campus may be ineffective in increasing university attendance.
    Keywords: University Competition, Branch Campus, Admission Standards, Transnational Education
    JEL: I23 L13 F23
    Date: 2014
  5. By: Jellal, Mohamed
    Abstract: This paper is a direct extension of the paper of Jones (2007). This author presents a simple Mincerian approach to endogenizing schooling time in market economy. His specification is closest to that in Mincer (1958) which does not take into account the social benefits of education. Our note extends his paper on the social returns to accumulation of human capital, with particular emphasis on the social returns to education which are given by the sum of the private and external marginal benefits of a unit of human capital. In other words, we study the problem of human capital externalities which comes from social interactions. We propose a policy of decentralization of the optimal education .
    Keywords: Education, Externalities, Social returns, Political economy, Taxation
    JEL: D62 H2 H23 I21 I25 I28
    Date: 2014–07–08
  6. By: Mendolia, Silvia (University of Wollongong); Walker, Ian (Lancaster University)
    Abstract: This paper investigates the relationship between personality traits in adolescence and performance in high school using a large and recent cohort study. In particular, we investigate the impact of locus of control, self-esteem and work ethics at age 15, on test scores at age 16, and on subject choices and subsequent performance at age 17-18. In particular, individuals with external locus of control or with low levels of self-esteem seem less likely to have good performance in test scores at age 16 and to pursue further studies at 17-18, especially in mathematics or sciences. We use matching methods to control for a rich set of adolescent and family characteristics and we find that personality traits do affect study choices and performance in test scores - particularly in mathematics and science. The results are stronger for adolescents from disadvantaged socio-economic backgrounds. We establish the robustness of our results using the methodology proposed by Altonji et al. (2005) that consists in making hypotheses as to the correlation between the unobservables that determine test scores and subjects' choices and, the unobservables that influence personality.
    Keywords: personality, education, locus of control, self-esteem
    JEL: I10 I21
    Date: 2014–06
  7. By: Pal, Sarmistha (University of Surrey); Saha, Bibhas (University of East Anglia)
    Abstract: We study school choice and school efficiency in terms of secondary school completion test scores by utilizing a unique database from Nepal. There are two novel features of our analysis: firstly we allow for heterogeneity among private schools, by distinguishing socially motivated trust-run schools from profit-motivated company-run schools, and secondly, we include school's expenditure as a determinant of its efficiency per unit of cost. We find that when expenditure is not included, the trust-run school comes on top, slightly but distinctly, ahead of the profit-motivated school. But if expenditure is included, the trust-run school's position becomes sensitive to the level of expenditure, as it is the only school to exhibit sensitivity between expenditure and test score. In the urban area, the public school is always at the bottom, and between the two types of the private school the trust-run school ranks first (second) at high (low) levels of expenditure. However, in the rural area it is a three way race, with the trust school coming on top again at high expenditure, but falling to bottom at low levels of expenditure. This picture is fairly robust to considerations of subject fixed effects and to inclusion or exclusion of private aided schools or private tuition. We show both theoretically and empirically that socially motivated schools can be efficient and outperform profit-motivated schools.
    Keywords: private school heterogeneity, school expenditure per student, efficiency, private school premium, social objectives, private motive, rural-urban dichotomy, Nepal
    JEL: H44 I22
    Date: 2014–06
  8. By: Kleibrink, Jan (University of Duisburg-Essen); Michaelsen, Maren M. (Ruhr University Bochum)
    Abstract: The Further and Higher Education Act of 1992 changed the Higher Education system in the UK by giving all polytechnics university status. Using the British Household Panel Survey and accounting for different sources of selection bias, we show that wage differentials between university and polytechnic graduates can be explained by a glass ceiling preventing polytechnic graduates from reaching professional occupations. After the reform, the glass ceiling disappeared and average wages of post-reform polytechnic graduates are not statistically different from average wages of post-reform graduates of traditional universities any more. This implies that the abolition of the 'two-tier' education system has reduced inequality among Higher Education graduates – a result that may be desirable in other systems of a 'two-tier' nature.
    Keywords: higher education, education reform, wage differentials, occupational sorting, United Kingdom
    JEL: I23 J31 J64
    Date: 2014–06
  9. By: Findeisen, Sebastian; Sachs, Dominik
    Abstract: We study the implications of limited commitment on education and tax policies chosen by benevolent governments. Individual wages are determined by both innate abilities and education levels. Consistent with real world practices, the government can decide to subsidize different levels of education at different rates. Deviations from full commitment tend to make education policies more progressive, increasing the education subsidy for initially low skilled agents and decreasing it for initially high skilled agents. We provide suggestive cross-country correlations for this mechanism.
    Keywords: Education Policies , Time-Inconsistency , Taxation , Inequality
    JEL: H21 H23 I21
    Date: 2014
  10. By: Cory Koedel (Department of Economics, University of Missouri-Columbia); Rajeev Darolia; Paco Martorell; Katie Wilson; Francisco Perez-Arce
    Abstract: This paper reports results from a resume-based field experiment designed to examine employer preferences for job applicants who attended for-profit colleges. For-profit colleges have seen sharp increases in enrollment in recent years despite alternatives such as public community colleges being much cheaper. We sent almost 9,000 fictitious resumes of young job applicants who recently completed their schooling to online job postings in six occupational categories and tracked employer callback rates. We find no evidence that employers prefer applicants with resumes listing a for-profit college relative to those whose resumes list either a community college or no college at all.
    Keywords: for profit college, 2-year college, returns to education, resume field experiment, sub-baccalaureate degree
    JEL: J24 H52 I28
    Date: 2014–06–28
  11. By: Pelkonen, Antti – Thomas
    Abstract: While societal expectations for university research have grown, university research has become more and more dependent on external funding sources. External funding has substantially increased at Finnish – and also UK – universities, and currently in practice a major share of university research is conducted with external funding. This report relates the main findings of a study that analysed the use of project-based research funding instruments at universities, most of which are external. The main focus in the study is on the aspects of novelty and creativity in research and the question of the extent to which different research funding instruments promote these aspects of research. This report draws on different data sources, but mostly on the UNI project (Universities, funding systems, and the renewal of the industrial knowledge base), funded by Tekes innovation research instrument. The major findings include an observation that Finnish research funding system lacks a funder that would strongly encourage risk-taking and novel approaches. Discontinuity and instability of research funding appears as a major challenge for research. There seems to be an overall increase of thematically predefined funding vis-à-vis free researcher-driven funding and close attention should be paid to this balance. Differences between Finland and the UK in terms of novelty generation turned out to be smaller than orignally expected.
    Keywords: funding, university research, novelty
    JEL: O38 O39
    Date: 2014–06–12
  12. By: Tansel, Aysit (Middle East Technical University); Karaoglan, Deniz (Middle East Technical University)
    Abstract: This is the first study which provides empirical analysis of the variation in health behaviors for adult men and women in Turkey which is a developing country. The health behaviors considered are smoking, drinking, fruit and vegetable consumption, exercise and body mass index (BMI). We find that in Turkey education is the most important factor that affects the health behaviors. The results indicate that smoking is positively associated with education at all levels with a decreasing effect with the level of education unlike in the developed countries. This result indicates that smoking is a serious public health problem in Turkey at all levels of education. Further, alcohol consumption and schooling are positively related and it increases by the level of education. Higher educated individuals clearly eat more fruits, vegetables and exercise more and their BMI levels are in the normal range compared to less educated and illiterate. We also highlight the importance of demographic factors, labor market status and household income. We use Health Survey of Turkish Statistical Institute (TURKSTAT) for years 2008, 2010 and 2012. This study will provide a baseline for further studies on the various aspects of health behaviors in Turkey.
    Keywords: health behaviors, education, demographic factors, Turkey
    JEL: I10 I12 I19
    Date: 2014–06
  13. By: Keren Mertens Horn
    Keywords: Residential Investment, School Performance, House Prices
    Date: 2014–02
  14. By: Vallejos, Catalina; Steel, Mark F. J.
    Abstract: The aim of this paper is to model the length of registration at university and its associated academic outcome for undergraduate students at the Pontificia Universidad Cat´olica de Chile. Survival time is defined as the time until the end of the enrollment period, which can relate to different reasons - graduation or two types of dropout - that are driven by different processes. Hence, a competing risks model is employed for the analysis. The issue of separation of the outcomes (which precludes maximum likelihood estimation) is handled through the use of Bayesian inference with an appropriately chosen prior. We are interested in identifying important determinants of university outcomes and the associated model uncertainty is formally addressed through Bayesian model averaging. The methodology introduced for modelling university outcomes is applied to three selected degree programmes, which are particularly affected by dropout and late graduation.
    Keywords: Bayesian model averaging; Competing risks; Outcomes separation; Proportional Odds model; University dropout
    JEL: C1 C11 C41 I23
    Date: 2014–05–26
  15. By: Lasse Eika; Magne Mogstad; Basit Zafar
    Abstract: We investigate the pattern of educational assortative mating, its evolution over time, and its impact on household income inequality. To these ends, we use rich data from the U.S. and Norway over the period 1980-2007. We find evidence of positive assortative mating at all levels of education in both countries. However, the time trends vary by the level of education: Among college graduates, assortative mating has been declining over time, whereas low educated are increasingly sorting into internally homogenous marriages. When looking within the group of college educated, we find strong but declining assortative mating by academic major. These findings motivate and guide a decomposition analysis, where we quantify the contribution of various factors to the distribution of household income. We find that educational assortative mating accounts for a non-negligible part of the cross-sectional inequality in household income. However, changes in assortative mating over time barely move the time trends in household income inequality. This is because the decline in assortative mating among the highly educated is offset by an increase in assortative mating among the low educated. By comparison, increases in the returns to education over time generate a considerable rise in household income inequality, but these price effects are partly mitigated by increases in college attendance and completion rates among women.
    JEL: D31 I24 J12
    Date: 2014–06
  16. By: Fromm, Nadin
    Abstract: Transnational education plays a key role in the current debate on the internationalization of higher education, and represents one response to the burgeoning growth in worldwide demand for tertiary education. The main focus of the present paper is on provider and institutional mobility in tertiary education, concentrating on the case of German higher education institutions. This paper studies the existing federal program responsible for the development and organization of transnational study programs. Empirical data is presented along with German-backed universities, which are discussed as one possible means for Germany to provide transnational higher education abroad. This paper introduces various political dimensions that may be included in the development of binational universities and presents them as a preliminary result of the burgeoning diffusion of tertiary education. -- In der wissenschaftlichen Debatte zur Internationalisierung von Hochschulbildung spielt die Transnationalisierung gegenwärtig die zentrale Rolle und wird als eine mögliche Antwort auf die stark wachsende Nachfrage weltweit nach Tertiärer Bildung diskutiert. Im folgenden Beitrag steht die sog. Einrichtungs- sowie Institutionenmobilität - als mögliche Ausprägungen von Transnationalisierung - im Mittelpunkt des wissenschaftlichen Interesses. Vor dem Hintergrund deutscher Aktivitäten werden der Begriff sowie das dahinterstehende Konzept von Transnationalisierung beschrieben. Dazu stellt der Artikel ein bestehendes öffentliches Programm vor, in dessen Rahmen transnationale Hochschulbildungsangebote mit deutscher Unterstützung im Ausland aufgebaut werden. Zuletzt entstanden so sog. German-backed universities, welche im internationalen Vergleich als besonders gelten können. Empirische Daten werden präsentiert, welche - mit Blick auf die Implementierung - den Typ näher beschreiben und auf die Wesensmerkmale eingehen. So wird die Implementierung der binationalen Hochschulen durch politische Motivationen und Treiber bestimmt, welche auch Gegenstand des vorliegenden Beitrags sind.
    Keywords: transnational higher education,definitions and approaches,provider and institutional mobility by German universities,implementation settings
    Date: 2014
  17. By: Joshua C. Hall (West Virginia University, College of Business and Economics)
    Abstract: School district and municipal borders do not always align. Non-congruent borders can create a fiscal commons problem where new development does not entirely "pay its way." In response, frustrated citizens often respond by voting for lower school spending. Using GIS data on Ohio school districts, the degree of non-congruence between school district and municipal territory is calculated. The results indicate that school districts with non-congruent borders generate less revenue from local sources and that these effects seem to increase with the degree of non-congruence. The findings are robust between OLS and treatment effects regression.
    Keywords: congruency, public education, polycentrism
    JEL: I21 I28 R12
    Date: 2014
  18. By: Cardamone, Paola; Pupo, Valeria; Ricotta, Fernanda
    Abstract: The aim of this paper is to assess the effect on firm total factor productivity of the university research. Since the impact of universities on firms’ performance is subtle and complex, we verify whether territorial context, sector and firm size may influence this relationship. Results show that university R&D does not seem to affect Italian firm productivity. However, if we consider geographical location and sector, we find that university activities have a positive effect on the performance of firms located in the North of Italy or operating in the specialised supplier sector. Several robustness checks confirm the significant role played by universities above all in the North of Italy. The policy implications of these findings are discussed.
    Keywords: University, R&D, Total Factor Productivity
    JEL: C21 D24 O30
    Date: 2014–04–30
  19. By: Hartog, Joop; Díaz Serrano, Lluís
    Abstract: While uncertainty abounds in almost any decision on investment in schooling, it is mostly ignored in research and virtually absent in labour economics tekst books. This paper documents the scope for risk, discusses the tough disentanglement of heterogeneity and risk, surveys the analytical models, laments the absence of a good workhorse model and points out the challenges worth tackling: document ex ante risk that investors face, develop a tractable and malleable analytical model and integrate the option of consumption smoothing in analytical and empirical work. Hedging labour market risk in the stock market can be safely ignored.
    Keywords: Economia de l'educació, Educació -- Aspectes econòmics, 33 - Economia, 37 - Educació. Ensenyament. Formació. Temps lliure,
    Date: 2014
  20. By: Amy Ellen Schwartz; Ioan Voicu; Keren Mertens Horn
    Date: 2014–02

This nep-edu issue is ©2014 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.