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on Education |
| By: | Hull, Marie C. (University of North Carolina, Greensboro) |
| Abstract: | Disruptions in family life can take many forms, but all have the potential to impact student learning. With school administrative data matched to birth records, I estimate the effect of unexpected changes in the home environment, or family shocks, on achievement. Identification comes from siblings observed in the same year. I find that family shocks are at least as important as teacher assignment for student learning. Furthermore, they have a relatively larger impact on students from affluent families; time use evidence indicates that this is likely because affluent parents are more involved in their children's learning. |
| Keywords: | education, human capital, family dynamics, educational inequality, time inputs |
| JEL: | J24 I21 I24 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9197&r=edu |
| By: | Black, Sandra E. (University of Texas at Austin); Cortes, Kalena E. (Texas A&M University); Lincove, Jane Arnold (Tulane University) |
| Abstract: | Access to higher education begins with a student's decision whether and where to apply to college. This paper examines racial and ethnic differences in college application behavior of high school graduates, using two recent graduation cohorts from Texas. We estimate racial and ethnic differences in the probability of applying to college, controlling for a student's college readiness, high school quality, certainty of college admissions, and high school fixed effects. We then investigate racial and ethnic differences in the choice of where to apply. We enhance the typical model of college matching by considering the social setting and high school feeder patterns of state universities. We find that racial and ethnic gaps in application rates, particularly for Hispanic students, are not explained by differential levels of college readiness, high school quality, or information regarding college admission processes. When applying to college, minorities are influenced by more than just matching their academic ability to the institution, and prefer institutions with a large proportion of same race students and campuses where same race students from their high school have been successful in the past. |
| Keywords: | college application, college readiness, high school quality, undermatching, race and ethnicity, low-income students, Texas Top 10% Plan, automatic admissions |
| JEL: | I21 I23 I24 J15 J18 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9169&r=edu |
| By: | Åslund, Olof (Institute for Evaluation of Labor Market and Education Policy (IFAU)); Grönqvist, Hans (Swedish Institute for Social Research (SOFI), Stockholm University); Hall, Caroline (IFAU and Uppsala Center for Labor Studies (UCLS)); Vlachos, Jonas (Department of Economics, Stockholm University and the Research Institute of Industrial Economics (IFN)) |
| Abstract: | We study the impact on criminal activity from a large scale Swedish reform of vocational upper secondary education, extending programs from two to three years and adding more general theoretical content. The reform directly concerns age groups where criminal activity is high and students who are highly overrepresented among criminal offenders. The nature of the reform and the rich administrative data allow us to shed light on several behavioral mechanisms. Our results show that the prolonged and more general education lead to a reduction in property crime, but no significant decrease in violent crime. The effect is mainly concentrated to the third year after enrollment, which suggests that being in school reduces the opportunities and/or inclinations to commit crime. |
| Keywords: | Education; Delinquency |
| JEL: | K42 |
| Date: | 2015–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2015_0006&r=edu |
| By: | Manasan, Rosario G.; Parel, Danileen Kristel C. |
| Abstract: | The state universities and colleges (SUCs) in the Philippines have always been a major issue mainly because of the poor quality of education that most of them offer, the undeveloped management and financial systems, and the inequality of access. And yet the government has been providing them considerable funding support (e.g., the budget allocation for FY 2012 amounts to PHP 26 billion) primarily due to the importance of tertiary education in promoting human development and improving the economy's competitiveness. A review of the mandates of the various SUCs in the selected regions covered by this study indicates that the mandates are fairly broad, to start with. But beyond this, the charters of most SUCs allow them to offer programs outside of their core mandates. Given the broad mandates of SUCs, there is, therefore, a substantial duplication in their program offerings. The high rates of program duplication appeared to be associated with an increase in the number of programs offered by SUCs during the period. Although SUCs perform better than private higher education institutions (PHEIs) in over 84 percent of professional board examinations (PBEs), SUCs have been able to improve their advantage further relative to PHEIs in the last seven years in 31 percent of the PBEs. Perhaps what is more worrisome than the persistently low overall average passing rate in PBEs is the preponderance of SUCs/PHEIs with zero passing rates in many PBEs during 2004–2011. The study offers some recommendations; among others, the Commission on Higher Education needs to enforce more vigorously its policy of closing existing programs of SUCs and PHEIs that perform under par year after year; and more effective measures to improve the quality of instruction should include faculty development and facilities upgrading. |
| Keywords: | Philippines, state universities and colleges (SUCs), private higher education institutions (PHEIs), program offerings, passing rates, board exam |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:phd:rpseri:rps_2015-02&r=edu |
| By: | Argys, Laura M. (University of Colorado Denver); Averett, Susan L. (Lafayette College) |
| Abstract: | Social scientists theorize that the inverse relationship between socio-economic status and family size represents a trade-off between the quality and quantity of children. Evaluating this hypothesis empirically requires addressing the simultaneity of the quality and quantity decisions. Researchers have used the unanticipated birth of twins as exogenous variation in family size or the sex composition of the first two children as an instrument for family size with mixed results. We exploit a different source of exogenous variation in family size. The One Child Policy (OCP) in China dramatically reduced Chinese fertility and we examine how the OCP has affected the educational attainment of Chinese migrants to the U.S. Using data from the American Community Survey (2009-2012) and a difference-in-differences strategy our results support the quality-quantity tradeoff theory. We find that education increased more for Chinese migrants born after the OCP than their counterparts from other East Asian countries. |
| Keywords: | education, migration, quality-quantity tradeoff, family size, One Child Policy |
| JEL: | I21 J18 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9196&r=edu |
| By: | Justine S. Hastings; Christopher A. Neilson; Anely Ramirez; Seth D. Zimmerman |
| Abstract: | We use large-scale surveys of Chilean college applicants and college students to explore the way students form beliefs about earnings and cost outcomes at different institutions and majors and how these beliefs relate to degree choice and persistence. Linking our survey records to administrative education and earnings data, we compare earnings and cost expectations to observed values for past students and follow survey participants forward to see how beliefs relate to matriculation and dropout outcomes. We find that students have correctly centered but noisy cost expectations, and appear to systematically overestimate earnings outcomes for past graduates. Students who overestimate costs are less likely to matriculate in any degree program and in their stated first-choice program, and are more likely to drop out. Students who overestimate earnings matriculate at similar rates to other students, but choose degree programs where past students have been less likely to graduate, have earned less early in their careers, and have been more likely to default on student loans. Consistent with an informal model of enrollment choice, students with a stated preference for labor market-related degree characteristics are less likely to overestimate earnings outcomes and choose degrees where past students have gone on to earn more, while the opposite is true for students with a stated preference for enjoyment of the curriculum. |
| JEL: | H52 I2 I24 I28 J24 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21330&r=edu |
| By: | Akguc, Mehtap; Ferrer, Ana |
| Abstract: | Using a recent survey of immigrants to France, we provide a detailed analysis of the educational attainment and labor market performance of various sub-population groups in France. Our results indicate that immigrants to France are less educated than the native born and that these differences can be tracked down to differences in socioeconomic background for most groups of immigrants. Similarly, there is a significant wage gap between immigrant and native-born workers, but this is reduced and sometimes disappears after correcting for selection into employment. In most cases the remaining differences in education and labor market outcomes seem related to the area of origin of the immigrant as well as where the education of the immigrant is obtained. |
| Keywords: | Immigration, France, educational attainment, labor market performance of immigrants |
| JEL: | F22 J15 J61 |
| Date: | 2015–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2015-11&r=edu |
| By: | Megan Way (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)); Kent Jones (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)); Lidija Polutnik (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)) |
| Abstract: | Although the awarding of the Nobel Peace Prize for 2014 to Malala Yousafzai demonstrates recognition of girl’s education as a political issue, the education of girls also has economic repercussions that specifically affect trade. These repercussions include: (a) Girls’ education leads to growth in developing countries; (b) Girls’ education results in more skilled labour and higher productivity; (c) To move up the global value chain, countries need a deep pool of skilled, productive labour; (d) For countries in the Asia-Pacific region that are seeking to allocate their public funding efficiently, girls’ education has a particularly high payoff because of high marginal returns and because of spillover effects to family members; (e) Trade benefits girls – when opportunities to work in trade-related industries exist, girls stay in school. Thus, a virtuous cycle exists between the education of girls and economic development. |
| Keywords: | Least developed countries, Duty-Free Quota-Free, major markets, exports |
| JEL: | F1 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:unt:arpobr:apb43&r=edu |
| By: | Massimo Anelli; Giovanni Peri |
| Abstract: | In this paper we use a newly constructed dataset following 30,000 Italian individuals from high school to labor market and we analyze whether the gender composition of peers in high school affected their choice of college major, their academic performance and their labor market income. We leverage the fact that the composition of high school classmates (peers), within school-cohort and teacher-group, was not chosen by the students and it was as good as random. We find that male students graduating from classes with at least 80% of male peers were more likely to choose Òprevalently maleÓ (PM) college majors (Economics, Business and Engineering). However, this higher propensity to enroll in PM majors faded away during college (through transfers and attrition) so that men from classes with at least 80% of male peers in high school did not have higher probability of graduating in PM majors. They had instead worse college performance and did not exhibit any difference in income or labor market outcomes after college. We do not find significant effects on women. |
| Keywords: | Peer effects, high school, gender, choice of college major, academic performance, wages |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:don:donwpa:078&r=edu |
| By: | Solga, Heike |
| Abstract: | This review focusses on the transition of low-achieving school leavers - that is, those who left regular schools or special schools for students with learning disabilities without or with only a lower secondary school degree - into the vocational education and training (VET) system. Most of them do not enter regular VET programs after finishing school but participate in prevocational measures. Some of them are able to eventually enter regular VET programs while others are never able to do so. The review summarizes what we know about how participation in prevocational measures influences the probability of subsequently entering regular VET programs and if so, why. The review shows the little knowledge we have about for whom these measures generate new opportunities, and for whom they reinforce disadvantages. The review includes research on access to regular VET programs because selection processes at this stage result in a selective - not random - group of participants in prevocational measures and research on prevocational programs. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbslm:spi2015501&r=edu |
| By: | OECD |
| Abstract: | Information and communication technology (ICT) use has been identified as one of the more active teaching practices, which promote skills students need for success. And yet, less than 40% of teachers across Teaching and Learning International Survey (TALIS) countries report using ICT as a regular part of their teaching practice. Shortages in computers, Internet access and software are commonly reported by school principals as hindering the provision of quality education in their schools. Across TALIS countries, many teachers report that the second and third most critical needs for their professional development are training in the use of ICT for teaching, and in new technologies in the workplace. The use of ICT in teaching can be encouraged particularly by participation in professional development activities (such as those that involve individual or collaborative research, or networks of teachers) and a positive classroom climate. |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaah:12-en&r=edu |
| By: | Aydede, Yigit; Dar, Atul A. |
| Abstract: | Inappropriate matches between workers and jobs in terms of education cause a surplus or deficit in schooling. One measure that allows us to quantify this mismatch is based on how much worker education levels deviate from the level required in their occupation. If workers are substantially overeducated, in that their actual education exceeds the required level of education, this implies underutilization in labour markets, a phenomenon that has been referred to, in the literature, as the “great training robberyâ€. A deficit in schooling, on the other hand, means a loss in productivity for firms and the economy as a whole. A second measure is a possible mismatch between workers’ field of study and that required in their occupation. The aim of this study is to understand the importance of these issues for the Canadian economy by analyzing the economic costs of educational mismatch. We explore both dimensions of the mismatch in Canada by using the 20 percent sample of the 2001 Census. Our results indicate that, although the annual cost of underutilization and productivity loss in Canada due to educational mismatch is not as sizeable as envisioned in policy circles, it is large enough to warrant further investigation. |
| Keywords: | Educational mismatch, relatedness, field of study, underutilization |
| JEL: | J6 J15 J61 |
| Date: | 2015–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2015-13&r=edu |
| By: | Bijwaard, G.E.;; Jones, A.M.; |
| Abstract: | Large differences in mortality rates across those with different levels of education are a well-established fact. This association between mortality and education may partly be explained by confounding factors, including intelligence. Intelligence may also be affected by education so that it becomes a mediating factor in the causal chain. In this paper we estimate the impact of education on mortality using inverse probability weighted (IPW) estimator, using either intelligence as a selection variable or as a mediating variable. We develop an IPW estimator to analyse the mediating effect in the context of survival models. Our estimates are based on administrative data, on men born in 1944-1947 who were examined for military service in the Netherlands between 1961-1965, linked to national death records. For these men we distinguish four education levels and we make pairwise comparisons. From the empirical analyses we conclude that the mortality differences observed by education are only attributable to education effects for high educated individuals. For low educated individuals the observed mortality gain is mainly attributable to differences in intelligence. |
| Keywords: | education; mortality; inverse probability weighting; mediators; mixed proportional hazard; |
| JEL: | C41 I14 I24 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:15/07&r=edu |
| By: | Elizabeth U. Cascio; Ayushi Narayan |
| Abstract: | Over the past decade, a technological breakthrough – hydraulic fracturing or “fracking” – has fueled a boom in oil and natural gas extraction by reaching shale reserves inaccessible through conventional technologies. We explore the educational response to fracking, taking advantage of the timing of its widespread introduction and the spatial variation in shale oil and gas reserves. We show that local labor demand shocks from fracking have been biased toward low-skilled labor and males, reducing the return to high school completion among men. We also show that fracking has increased high school dropout rates of male teens, both overall and relative to females. Our estimates imply that, absent fracking, the male-female gap in high school dropout rates among 17- to 18-year-olds would have narrowed by about 11% between 2000 and 2013 instead of remaining unchanged. Our estimates also imply an elasticity of high school completion with respect to the return to high school of 0.47, a figure below historical estimates. Explanations for our findings aside from fracking’s low-skill bias – changes in school inputs, population demographics, and resource prices – receive less empirical support. |
| JEL: | I20 J2 J3 O33 Q33 R23 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21359&r=edu |
| By: | Bennett, Patrick (Department of Economics, Copenhagen Business School); La Cour, Lisbeth (Department of Economics, Copenhagen Business School); Larsen, Birthe (Department of Economics, Copenhagen Business School); Waisman, Gisela (Regeringskansliet, Stockholm) |
| Abstract: | This paper explores potential explanations behind the educational gap between young natives and immigrants using two measures, negative attitudes towards immigrants and networking, which may influence natives and immigrants differently. The paper considers, both theoretically and empirically, the impact of negative attitudes and networking taking into account that these parameters may influence high and uneducated workers as well as immigrants and natives differently, creating different incentives to acquire education for the two ethnic groups. Using rich Danish administrative data, this paper finds evidence that greater negative attitudes increase incentives for males to acquire education and that networking also increases immigrant education. |
| Keywords: | incentives; immigrants; education; attitudes |
| JEL: | I20 I24 J15 |
| Date: | 2015–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2015_001&r=edu |
| By: | Sevilla, Almudena (Queen Mary, University of London); Borra, Cristina (University of Seville) |
| Abstract: | We use novel diary surveys coupled with universities' administrative student data for the last three decades to document that increased competition for university places at elite institutions in the United Kingdom contributes to explain growing gaps in time investments between college and non-college educated parents. Competition for university places in the UK grew significantly during the 1980s and early 1990s, and gradually diminished afterwards. We find that the gap in time investments by college and non-college educated parents and their children widened up precisely during this first period, especially in terms of human capital enhancing activities. |
| Keywords: | parental time investments, children, college competition |
| JEL: | J13 J24 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9168&r=edu |
| By: | Baert, Stijn (Ghent University); Rotsaert, Olivier (Ghent University); Verhaest, Dieter (KU Leuven); Omey, Eddy (Ghent University) |
| Abstract: | We investigate the impact of student work experience on later hiring chances. To completely rule out potential endogeneity, we present a field experiment in which various forms of student work experience are randomly disclosed by more than 1000 fictitious graduates applying for jobs in Belgium. Theoretical mechanisms are investigated by estimating heterogeneous treatment effects by the relevance and timing of revealed student work experience. We find that neither form of student work experience enhances initial recruitment decisions. For a number of candidate subgroups (by education level and occupation type), even an adverse effect is found. |
| Keywords: | student employment, transitions in youth, human capital, signaling, randomised field experiments |
| JEL: | J24 I21 D83 C93 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9170&r=edu |
| By: | OECD |
| Abstract: | The share of students with an immigrant background increased between 2003 and 2012, both in traditional and new destination countries. The performance difference in mathematics between immigrant and non-immigrant students decreased, on average, between 2003 and 2012. Differences in socio-economic background explain less than half of the performance difference in mathematics between immigrant and non-immigrant students. |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduddd:53-en&r=edu |
| By: | Blom, Erica (affiliation not available); Cadena, Brian C. (University of Colorado, Boulder); Keys, Benjamin J. (Harris School, University of Chicago) |
| Abstract: | This paper examines the relationship between individuals' personal exposure to economic conditions and their investment choices in the context of human capital. Focusing on bachelor's degree recipients, we find that birth cohorts exposed to higher unemployment rates during typical schooling years select majors that earn higher wages, that have better employment prospects, and that more often lead to work in a related field. Much of this switching behavior can be considered a rational response to differences in particular majors' labor market prospects during a recession. However, higher unemployment leads to other meaningful changes in the distribution of majors. Conditional on changes in lifetime expected earnings, recessions encourage women to enter male-dominated fields, and students of both genders pursue more difficult majors, such as STEM fields. These findings imply that the economic environment changes how students select majors, possibly by encouraging them to consider a broader range of possible degree fields. Finally, in the absence of this compensating behavior, we estimate that the average estimated costs of graduating in a recession would be roughly ten percent larger. |
| Keywords: | college major, business cycle, human capital investment, STEM majors, gender differences |
| JEL: | E32 I23 J22 J24 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9167&r=edu |
| By: | Francisco J.Beltrán Tapia (University of Cambridge); Julio Martínez-Galarraga (Universitat de València) |
| Abstract: | By collecting a large dataset in mid-19th century Spain, this paper contributes to the debate on institutions and economic development by examining the historical link between land access inequality and education. This paper analyses information from the 464 districts existent in 1860 and confirms that there is a negative relationship between the fraction of farm labourers and literacy rates. This result does not disappear when a large set of potential confounding factors are included in the analysis. The use of the Reconquest as a quasi-natural experiment allows us to rule out further concerns about potential endogeneity. Likewise, by employing data on schooling enrolment rates and number of teachers, this paper explores the mechanisms behind the observed relationship in order to ascertain to which extent demand or supply factors are responsible for it. Lastly, the gender composition of the data, which enables distinguishing between female and male literacy levels, together with boys and girls schooling enrolment rates, is also examined. |
| Date: | 2015–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:nuf:esohwp:_137&r=edu |
| By: | Findeisen, Sebastian (University of Mannheim); Sachs, Dominik (University of Cologne) |
| Abstract: | The total social benefits of college education exceed the private benefits because the government receives a share of the monetary returns in the form of income taxes. We study the policy implications of this fiscal externality in an optimal dynamic tax framework. Using a variational approach we derive a formula for the revenue effect of an increase in college education subsidies and for the excess burden of income taxation caused by the college margin. We also show how the optimal nonlinear income tax problem is altered by the college margin. Our modeling assumptions are strongly guided by the recent structural labor literature on college education. The model incorporates multidimensional heterogeneity, idiosyncratic risk and borrowing constraints. The model matches key empirical results on college enrollment patterns, returns to education and enrollment elasticities. Quantitatively, we find that a marginal increase in college subsidies in the US is at least 70 percent self-financing through the net-present value increase in future tax revenue. When targeting this increase to children in the lowest parental income tercile, it is even up to 165 percent self-financing. The excess burden of income taxation is only slightly altered by the college margin and therefore the optimal Mirrleesian income tax schedule is barely affected as well, in particular if subsidies are set at their optimal level. |
| Keywords: | optimal taxation, college subsidies, college enrollment, tax reforms |
| JEL: | H21 H23 I22 I24 I28 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9171&r=edu |
| By: | Borghans, Lex (Maastricht University); Golsteyn, Bart H.H. (Maastricht University) |
| Abstract: | This paper analyzes the tendency of people to choose default options when offered courses to acquire job related skills. We ask a random sample of Dutch people aged 6-80 which three skills are most important in their (future or past) jobs. Further on in the survey, we randomly select one of the skills the respondent indicated and (hypothetically) offer the respondent a course regarding this skill. The respondent can accept this offer, but can also exchange it for a course regarding one of the two other skills indicated. Our findings indicate that people generally have a strong tendency to choose the default option. This effect is similar across gender and education level. It appears that the effect of the default option is less strong around age 30 and declines after age 60. |
| Keywords: | training, human capital, default option, experiment |
| JEL: | J24 J31 I2 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9180&r=edu |
| By: | Prashant Bharadwaj; Petter Lundborg; Dan-Olof Rooth |
| Abstract: | We study the effect of birth weight on long-run outcomes, including permanent income, income across various stages of the lifecycle, education, social benefits take-up, and adult mortality. For this purpose, we have linked a unique dataset on nearly all Swedish twins born between 1926- 1958, containing information on birth weight, to administrative records spanning nearly entire life time lab or market histories. We find that birth weight positively affects permanent income and income across large parts of the life cycle, although there is some evidence of a fade out after age 50. Our results indicate that lower birth weight children are more likely to avail of social insurance programs such as unemployment and sickness insurance and that birth weight matters for adult mortality. We supplement our main analysis with more recent data, which enables us to study how the impact of birth weight on income and education of young adults has changed across cohorts born almost 50 years apart. |
| JEL: | I1 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21354&r=edu |
| By: | Fernandez-Zubieta, Ana; Geuna, Aldo; Lawson, Cornelia (University of Turin) |
| Abstract: | In this chapter we review the literature on the analysis of researcher mobility and productivity highlighting recent changes in the research system - internationalization, inter-sector mobility and collaboration and career diversification which make researcher mobility more relevant for the dynamics of knowledge creation and dissemination. Our review reveals that to date we still know little about the consequences and motivations of increased mobility for individual researchers. We contribute by presenting a typology of researcher mobility, and considering the relevance of multiple mobility events throughout a researcher career. Finally, we review the modeling problems related to analyzing the effect of mobility on academic performance at the individual level, and suggest various solutions. |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:201522&r=edu |
| By: | Findeisen, Sebastian; Sachs, Dominik |
| Abstract: | The total social benefits of college education exceed the private benefits because the government receives a share of the monetary returns in the form of income taxes. We study the policy implications of this fiscal externality in an optimal dynamic tax framework. Using a variational approach we derive a formula for the revenue effect of an increase in college education subsidies and for the excess burden of income taxation caused by the college margin. We also show how the optimal nonlinear income tax problem is altered by the college margin. Our modeling assumptions are strongly guided by the recent structural labor literature on college education. The model incorporates multidimensional heterogeneity, idiosyncratic risk and borrowing constraints. The model matches key empirical results on college enrollment patterns, returns to education and enrollment elasticities. Quantitatively, we find that a marginal increase in college subsidies in the US is at least 70 percent self-financing through the net-present value increase in future tax revenue. When targeting this increase to children in the lowest parental income tercile, it is even up to 165 percent self-financing. The excess burden of income taxation is only slightly altered by the college margin and therefore the optimal Mirrleesian income tax schedule is barely affected as well, in particular if subsidies are set at their optimal level. |
| Keywords: | Optimal Taxation , College Subsidies , College Enrollment , Tax Reforms |
| JEL: | H21 H23 I22 I24 I28 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:mnh:wpaper:39005&r=edu |
| By: | Ray, Rita |
| Abstract: | This paper examines the effect of STEM graduates on the level and growth of real GDP per-capita for the 50 US states and the District of Columbia between 1990 and 2011. This paper also examines the effect of STEM graduates on approved utility patents per one million people. The findings show that the share of STEM graduates has a statistically significant positive effect on the level and growth of real GDP per-capita. The results are robust irrespective of estimation methods. The paper finds that an increase in the share of STEM graduates increases the number of approved utility patents per one million people but that the statistical significance of the results depends on the estimation methods. |
| Keywords: | STEM Education, Economic Performance |
| JEL: | C33 C51 I24 O40 O51 R19 |
| Date: | 2015–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65511&r=edu |
| By: | Lancia, Francesco (University of Vienna); Russo, Alessia (Dept. of Economics, University of Oslo) |
| Abstract: | This paper presents a dynamic politico-economic theory of fiscal policy to explain the simultaneous existence of public education and pensions in modern democracies. The driving force of the model is the intergenerational conflict over the allocation of the public budget. Successive generations of voters choose fiscal policies through repeated elections. The political power of elderly voters creates the motive for adults to support public investment in the human capital of future generations, since it expands future pension possibilities. We characterize the Markov perfect equilibrium of the voting game in a small open economy. The equilibrium can reproduce qualitative and quantitative features of intergenerational fiscal policies in modern economies. |
| Keywords: | Intergenerational conflict; Markov perfect equilibrium; pension; public education; repeated voting; small open economy |
| JEL: | D72 E62 H23 H30 H53 |
| Date: | 2015–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2015_001&r=edu |