nep-edu New Economics Papers
on Education
Issue of 2014‒11‒12
ten papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Does Education Affect Risk Aversion?: Evidence from the 1973 British Education Reform By Seeun Jung
  2. Assessing the Effect of School Days and Absences on Test Score Performance By Esteban Aucejo; Teresa Foy Romano
  3. Sweden’s School Choice Reform and Equality of Opportunity By Edmark, Karin; Frölich, Markus; Wondratschek, Verena
  4. Mobility of Students from Arab Countries and Internationalization of Higher Education with Application to Medical Studies By driouchi, ahmed; achehboune, amale
  5. Education and Health Knowledge: Evidence from UK Compulsory Schooling Reforms By David W. Johnston; Grace Lordan; Michael A. Shields; Agne Suziedelyte
  6. The Emergence of For-Profit Higher Education Institutions By Jacqmin, Julien
  7. The Economic Value of Iowa’s Public Universities By Swenson, David A.
  8. How Risky Is the Choice of a University Major? By Kässi, Otto
  9. Career Prospects of Overeducated Americans By Brian Clark; Arnaud Maurel; Clement Joubert
  10. Economics of Migration of Students from the Arab Region to OECD countries By Driouchi, Ahmed

  1. By: Seeun Jung (Université de Cergy-Pontoise, THEMA)
    Abstract: Individual risk attitudes are widely used in order to predict decisions regarding education. These uses of risk attitudes as a control variable for education decisions, however, have been criticized due to potential reverse causality. The causality between risk aversion and education is not clear, and it is hard to disentangle the different directions. We have a very first attempt to investigate the causal effect of education on risk aversion by looking at the 1973 British Education Reform which increased the end of compulsory schooling from from 15 to 16. We find that years of schooling increase risk-aversion level via IV2SLS, which is contrary to the existing literature to our knowledge. This result is especially stronger for those with lower education. We suggest that in early education, education makes individuals more risk averse, whereas in more adult education such as tertiary education, years of schooling diminish risk aversion as suggested in other literatures. In addition, this negative causal effect of education on risk aversion could relieve our concerns about the endogeneity/reverse causality issue when using risk aversion as an explanatory variable for education decisions, because the sign would still credible as coefficients are underestimated.
    Keywords: Risk Aversion; Education Reform; Instrumental Variable
    JEL: C36 I21 I28 J24
    Date: 2014
  2. By: Esteban Aucejo; Teresa Foy Romano
    Abstract: While instructional time is viewed as crucial to learning, little is known about the effectiveness of reducing absences relative to increasing the number of school days. In this regard, this paper jointly estimates the effect of absences and length of the school calendar on test score performance. Using administrative data from North Carolina public schools, we exploit a state policy that provides variation in the number of days prior to standardized testing and find substantial differences between these effects. Extending the school calendar by ten days increases math and reading test scores by only 0.8% and 0.2% of a standard deviation, respectively; a similar reduction in absences would lead to gains of 5.8% and 3% in math and reading. We perform a number of robustness checks including utilizing u data to instrument for absences, family-year fixed effects, separating excused and unexcused absences, and controlling for a contemporaneous measure of student disengagement. Our results are robust to these alternative specifications. In addition, our findings indicate considerable heterogeneity across student ability, suggesting that targeting absenteeism among low performing students could aid in narrowing current gaps in performance.
    Keywords: Absences, days, schools, teachers
    JEL: I20
    Date: 2014–09
  3. By: Edmark, Karin (Uppsala Center for Labor Studies); Frölich, Markus (University of Mannheim); Wondratschek, Verena (Centre for European Economic Research)
    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: C21 I24
    Date: 2014–06–23
  4. By: driouchi, ahmed; achehboune, amale
    Abstract: Abstract With the international liberalization of services, both education and medical care are becoming global. Medical education is consequently subject to changes in education and to reforms taking place in the health systems. The Arab world is not insulated from these international trends. The mobility of students from this part of the world accounts for the constraints related to accessing medical education in the countries of origin but also for the benefits provided by studying abroad. The current paper describes the costs and benefits related to medical education and to the incentives related to the mobility of students. It shows that while the medical educational system is changing in the Arab world, mobility of students is increasingly attractive as larger benefits are expected while studying abroad.
    Keywords: Migration of Students- Internationalization of Education-Medical Education
    JEL: F2 I1 I2
    Date: 2014–09–26
  5. By: David W. Johnston; Grace Lordan; Michael A. Shields; Agne Suziedelyte
    Abstract: We investigate if there is a causal link between education and health knowledge using data from the 1984/85 and 1991/92 waves of the UK Health and Lifestyle Survey (HALS). Uniquely, the survey asks respondents what they think are the main causes of ten common health conditions, and we compare these answers to those given by medical professionals to form an index of health knowledge. For causal identification we use increases in the UK minimum school leaving age in 1947 (from 14 to 15) and 1972 (from 15 to 16) to provide exogenous variation in education. These reforms predominantly induced adolescents who would have left school to stay for one additionally mandated year. Naïve ordinary least squares estimates suggest that education significantly increases health knowledge, with a one-year increase in schooling increasing the health knowledge index by 15% of a standard deviation. In contrast, estimates from instrumental-variable models show that increased schooling due to the education reforms did not significantly affect health knowledge: a one-year increase in schooling is estimated to decrease the health knowledge index by 0.1% of a standard deviation. This main result is robust to numerous specification tests and alternative formulations of the health knowledge index. Further research is required to determine whether there is also no causal link between higher levels of education - such as post-school qualifications - and health knowledge.
    Keywords: Education, health, knowledge, compulsory schooling, causality
    JEL: I20 I10 I12
    Date: 2014–09
  6. By: Jacqmin, Julien
    Abstract: This paper examines the market conditions that facilitate the entry of for-profit institutions into the higher education market. I show how, despite significant government financial support for public institutions, for-profit institutions may still find it profitable to enter the market. They do so by spending large amounts of money on advertising campaigns in order to attract students who are relatively more influenced by the persuasive effect of advertising. I show that entry is more likely the more government subsidies are targeted directly toward students, as opposed to institutions. Even if it decreases social welfare, the introduction of market conditions that are friendly to for-profit universities will allow a government to fulfill its objective of increasing participation in the higher education system.
    Keywords: For-profit higher education institutions, competition, entry, advertising, mixed duopoly
    JEL: I20 I23 I28 L3 L30
    Date: 2014
  7. By: Swenson, David A.
    Abstract: This analysis measures the economic value of Iowa’s public universities – The University of Iowa, Iowa State University, and the University of Northern Iowa.� There are two dimensions evaluated: the overall worth of operating the universities as educational and service institutions and the value of student spending in their respective area economies.� This analysis incorporates a number of best practices for measuring the worth of universities to regional economies.
    Keywords: economic impact; university economic impact; input output analysis
    Date: 2014–10–09
  8. By: Kässi, Otto
    Abstract: This paper estimates the monetary returns to different university majors and the risks related to them. The residuals from a Mincer-type income regression are decomposed into unobserved heterogeneity (known to the individual when making her education choice) and risk (unknown to the individual). The risk estimates are corrected for selection by applying the selection correction model of Lee (1983) and an instrument based on the local supply of education in different majors. The differences in risks between different majors are found to be mostly statistically insignificant but differences in returns to majors are larger and significant. Both, income uncertainty and mean returns are found to be larger for men than for women.
    Keywords: return to education; uncertainty; selection
    JEL: J31
    Date: 2014–07–13
  9. By: Brian Clark; Arnaud Maurel (Duke University); Clement Joubert (University of North Carolina at Chapel H)
    Abstract: In this paper we analyze career dynamics for the nearly 30% of U.S. workers who are deemed overeducated in the literature. We use data from the National Longitudinal Survey of Youth 1979 combined with the pooled 1989-1991 waves of the Current Population Survey to analyze overeducation status transitions and the corresponding effects on wages. We find that overeducation is a persistent phenomenon at the aggregate and individual levels, with 73% of workers remaining overeducated after one year. Further, the hazard rate out of overeducation drops by about 60% during the first 5 years spent overeducated. However, the estimation of a mixed proportional hazard model suggests that this is attributable to selection on unobservables rather than true duration dependence. Finally, overeducation is associated with lower current as well as future wages, which points to the existence of scarring effects.
    Date: 2014
  10. By: Driouchi, Ahmed
    Abstract: Abstract: Economic studies on migration of skilled labor are mainly related to those trained in the country of origin but are increasingly including students trained abroad that return or not to their home countries. There are incentives and constraints that are provided by both origin and destination countries but the living conditions and the expected relative wages appear to be the most important sources of attraction of students to migrate. The restrictions of access to some schools such as those of medical sciences and architecture could be also driving further migration. The internationalization of the education system and the delocalization of universities in relation to globalization and trade in services are also encouraging these movements. These directions are likely to be expanded under the high levels of unemployment and the expected low local wages. This paper expands early models of skilled labor migration to account for students. Empirical investigations based on Arab countries are pursued. They show clearly the importance of this movement and its determination mainly by the differences in relative expected wages and the anticipated living conditions.
    Keywords: Keywords: Migration, students, Arab World, OECD, theory, applications.
    JEL: J6 O1
    Date: 2014–09–24

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