nep-edu New Economics Papers
on Education
Issue of 2019‒04‒15
five papers chosen by
Marco Novarese
Università del Piemonte Orientale

  1. How does for-profit college attendance affect student loans, defaults and labor market outcomes? By Luis Armona; Rajashri Chakrabarti; Michael F. Lovenheim
  2. Peer Diversity, College Performance and Educational Choices By Chevalier, Arnaud; Isphording, Ingo E.; Lisauskaite, Elena
  3. Selecting or Rewarding Teachers? International Evidence from Primary Schools By Braga, Michela; Checchi, Daniele; Garrouste, Christelle; Scervini, Francesco
  4. Paying out and crowding out? The globalization of higher education By Machin, Stephen; Murphy, Richard
  5. Present Bias and Underinvestment in Education? Long-run Effects of Childhood Exposure to Booms in Colombia By Bladimir Carrillo

  1. By: Luis Armona; Rajashri Chakrabarti; Michael F. Lovenheim
    Abstract: For-profit providers are becoming an increasingly important fixture of US higher education markets. Students who attend for-profit institutions take on more educational debt, have worse labor market outcomes, and are more likely to default than students attending similarly-selective public schools. Because for-profits tend to serve students from more disadvantaged backgrounds, it is important to isolate the causal effect of for-profit enrollment on educational and labor market outcomes. We approach this problem using a novel instrument combined with more comprehensive data on student outcomes than has been employed in prior research. Our instrument leverages the interaction between changes in the demand for college due to labor demand shocks and the local supply of for-profit schools. We compare enrollment and postsecondary outcome changes across areas that experience similar labor demand shocks but that have different latent supply of for-profit institutions. The first-stage estimates show that students are much more likely to enroll in a for-profit institution for a given labor demand change when there is a higher supply of such schools in the base period. Among four-year students, for-profit enrollment leads to more loans, higher loan amounts, an increased likelihood of borrowing, an increased risk of default and worse labor market outcomes. Two-year for-profit students also take out more loans, have higher default rates and lower earnings. But, they are more likely to graduate and to earn over $25,000 per year (the median earnings of high school graduates). Finally, we show that for-profit entry and exit decisions are at most weakly responsive to labor demand shocks. Our results point to low returns to for-profit enrollment that have important implications for public investments in higher education as well as how students make postsecondary choices.
    Keywords: postsecondary education, for-profits schools, student loans, default, returns to education
    JEL: I23 J24
    Date: 2019
  2. By: Chevalier, Arnaud (Royal Holloway, University of London); Isphording, Ingo E. (IZA); Lisauskaite, Elena (Royal Holloway, University of London)
    Abstract: We study the effect of ethno-linguistic classroom composition in college on educational performance, educational choices and post-graduation migration in a setting of quasi-random assignment to undergraduate seminars at a British university. We focus on two core variables: the share of non-English-speaking students and the diversity within the group of non-English-speaking students with respect to their linguistic background. English-speaking students are largely unaffected by the ethno-linguistic classroom composition. Non-English-speaking students benefit from a larger diversity in their performance and increase their interaction with English-speaking students. Educational choices of non-English-speaking students become more similar to choices of English-speaking students in response to more diverse classes. Post-graduation, non-English students who have been assigned to higher shares of non-English students in the compulsory stage are more likely to leave the country. Our results imply that current levels of internationalisation do not impose a threat to native education. Avoiding segregation along ethnic lines is key in providing education for an internationalised studentship.
    Keywords: higher education, diversity, peer effects, foreign students
    JEL: I21 I24 J15
    Date: 2019–03
  3. By: Braga, Michela (University of Milan); Checchi, Daniele (University of Milan); Garrouste, Christelle (Paris 12 Val de Marne University); Scervini, Francesco (Istituto Universitario di Studi Superiori di Pavia (IUSS))
    Abstract: Using data from three waves of PIRLS, this paper examines the effect of teacher quality on fourth-grade students' literacy test scores by exploiting variations induced by reforms in teachers' selection and/or reward schemes. We construct an original data set of relevant reforms taking place at the national level over the last century and affecting the working conditions of primary school teachers, matching them by the year they entered the profession. After showing that teacher experience/age and qualification are significantly correlated with student competencies, we study the correlation between teacher working conditions (including recruitment, pay and retirement policies) and pupil achievement. Our identifying assumption is that the impact of reforms dissipates with the distance between the reform's introduction and entry into the profession. The results point to a more selective recruitment process and, to a lesser extent, more generous reward policies as effective ways to enhance student performance.
    Keywords: student achievements, PIRLS, teacher recruitment process, teacher pay
    JEL: H52 I21 I28 J44
    Date: 2019–03
  4. By: Machin, Stephen; Murphy, Richard
    Abstract: Increased globalization of higher education has occurred as more students from across the world now enrol in universities abroad for their post-school education. We study the consequences of having more foreign students in one of the world’s biggest receivers of international students, the UK’s higher educational system. To do so, we estimate the impact of growing numbers of international students on the number of domestic students. Using rich administrative data, we find no evidence of crowd out of domestic undergraduates whose enrolment numbers are regulated by maximum quotas. For domestic postgraduates, who do not face such quotas, there is evidence of crowd in. We establish causality of this relationship by employing two empirical strategies to predict exogenous international student growth. The first uses shift-share instruments based on historical patterns of student enrolment from countries attending specific university departments. The second is based on the fast growth in enrolment of Chinese students which was facilitated by changes in visa regulations in combination with distinct subject of study preferences.
    Keywords: student enrollment; foreign students
    JEL: I23
    Date: 2017–09–01
  5. By: Bladimir Carrillo
    Abstract: This paper examines the long-run impacts of income shocks by exploiting variation in coffee cultivation patterns within Colombia and world coffee prices during cohorts’ school-going years in a differences-in-differences framework. The results indicate that cohorts who faced higher returns to coffee-related work during school-going years completed fewer years of schooling and have lower income in adulthood. These findings suggest that leaving school during temporary booms results in a significant loss of long-term income. This is consistent with the possibility that students may ignore or heavily discount the future consequences of dropout decisions when faced with immediate income gains.
    Keywords: Coffee price shocks, transitory income shocks, human capital accumulation, opportunitycost of schooling, long-run impacts, schooling.
    JEL: J24 O12 O13
    Date: 2019–03–28

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