nep-edu New Economics Papers
on Education
Issue of 2023‒05‒22
eight papers chosen by
Nádia Simões
Instituto Universitário de Lisboa

  1. The Decline of Routine Tasks, Education Investments, and Intergenerational Mobility By Patrick Bennett; Kai Liu; Kjell G. Salvanes
  2. Revisiting the Returns to Higher Education: Heterogeneity by Cognitive and Non-Cognitive Abilities By Oliver Cassagneau-Francis
  3. The Increasing Penalty to Occupation-Education Mismatch By Cassidy, Hugh; Gaulke, Amanda
  4. Should You Meet the Parents? The Impact of Information on Non-test Score Attributes on School Choice By Facchetti, Elisa; Neri, Lorenzo; Ovidi, Marco
  5. The Women Empowering Effect of Higher Education By Elsayed, Ahmed; Shirshikova, Alina
  6. Financial Literacy, Experimental Preference Measures and Field Behavior – A Randomized Educational Intervention By Matthias Sutter; Michael Weyland; Anna Untertrifaller; Manuel Froitzheim; Sebastian O. Schneider
  7. The Role of Earnings, Financial, and other Factors in University Attendance By Oliver Cassagneau-Francis
  8. Improving the effectiveness of financial education programs. A targeting approach By Ginevra Buratti; Alessio D'Ignazio

  1. By: Patrick Bennett; Kai Liu; Kjell G. Salvanes
    Abstract: How does a large structural change to the labor market affect education investments made at young ages? Exploiting differential exposure to the national decline in routine-task intensity across local labor markets, we show that the secular decline in routine tasks causes major shifts in education investments of high school students, where they invest less in vocational-trades education and increasingly invest in college education. Our results highlight that labor demand changes impact inequality in the next generation. Low-ability and low-SES students are most responsive to task-biased demand changes and, as a result, intergenerational mobility in college education increases.
    Date: 2023
  2. By: Oliver Cassagneau-Francis (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Recent work has highlighted the significant variation in returns to higher education across individuals. We develop a novel methodology-exploiting recent advances in the identification of mixture models-which groups individuals according to their prior ability and estimates the wage returns to a university degree by group. We prove the non-parametric identification of our model. Applying our method to data from a UK cohort study, our findings reflect recent evidence that skills and ability are multidimensional. Our flexible model allows the returns to university to vary across the (multi-dimensional) ability distribution, a flexibility missing from commonly used additive models, but which we show is empirically important. The returns to higher education are 3-4 times larger than the returns to prior cognitive and non-cognitive abilities. Returns are generally increasing in ability for both men and women, but vary non-monotonically across the ability distribution.
    Keywords: Mixture models, Distributions, Treatment effects, Higher education, Wages, Human capital, Cognitive and non-cognitive abilities
    Date: 2022–05–19
  3. By: Cassidy, Hugh (Kansas State University); Gaulke, Amanda (Kansas State University)
    Abstract: College-educated workers in jobs unrelated to their degree generally receive lower wages compared to well-matched workers. Our analysis of data from the National Survey of College Graduates shows that although the rate of this mismatch declined only slightly (19% to 17%), the wage penalty increased by 51% between 1993 and 2019. Changes in the composition of field of study over time, as well as declining returns to "excess" education above what is required for the occupation both help to explain the increasing penalty, especially for women. Mismatch has become more closely associated with lowerreturn occupations for men but not women.
    Keywords: education mismatch, field of study, wage penalty
    JEL: J24 I26 I23 J31
    Date: 2023–04
  4. By: Facchetti, Elisa (Institute for Fiscal Studies, London); Neri, Lorenzo (University of St. Andrews); Ovidi, Marco (Catholic University Milan)
    Abstract: Understanding parental response to non-test score attributes is crucial to design effective school choice systems. We study an intervention providing parents with hard-to-find information on the school environment while holding information on school performance constant. The provision of this information decreases the outflow to private institutions by 17% and increases enrollment at local state schools, particularly among high-income and high-performing students. This intervention encourages parents to expand their state-school search without affecting their taste for academic performance, generating increased competition for schools with desirable attributes. These findings imply that simple, low-cost interventions may improve state schools' finances and composition.
    Keywords: school choice, non-test score school attributes, information intervention
    JEL: I24 I28 H75
    Date: 2023–04
  5. By: Elsayed, Ahmed (American University in Cairo); Shirshikova, Alina (Maastricht University)
    Abstract: We examine the effects of the large-scale construction of public universities in Egypt during the 1960s and 1970s. We found that opening a local university increased the likelihood of obtaining higher education degrees and had long-lasting positive effects on labor market and marriage outcomes, particularly for women. We give insights on internal migration as a channel and show that migration prior to university enrollment age decreased while migration after that age increased as an outcome of university construction. Local universities reduced men's migration for study and women's migration for early marriage. The paper highlights the importance of increasing access to higher education for positive social and labor outcomes, particularly for women.
    Keywords: umpowerment of women, universities, higher education, Egypt
    JEL: I21 I23 J22 J24 O15 O55
    Date: 2023–04
  6. By: Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn, University of Cologne, University of Innsbruck, IZA Bonn, and CESifo Munich); Michael Weyland (Ludwigsburg University of Education); Anna Untertrifaller (University of Cologne); Manuel Froitzheim (University of Siegen); Sebastian O. Schneider (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: We present the results of a randomized intervention to study how teaching financial literacy to 16-year old high-school students affects their behavior in risk and time preference tasks. Compared to two different control treatments, we find that teaching financial literacy makes subjects behave more patiently, more time-consistent, and more risk-averse. These effects persist for up to almost 5 years after our intervention. Behavior in the risk and time preference tasks is related to financial behavior outside the lab, in particular spending patterns. This shows that teaching financial literacy affects economic decision-making which in turn is important for field behavior.
    Keywords: Financial literacy, randomized intervention, risk preferences, time preferences, financial behavior, field experiment
    JEL: C93 D14 I21
    Date: 2023–05
  7. By: Oliver Cassagneau-Francis (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Why do some people choose to attend university, and enjoy state-subsidised benefits, while others do not? We shed new light on this key issue by comparing and quantifying the roles of earnings, financial, and non-pecuniary factors in the educational decisions of young people in the UK. We investigate changes in these factors over time, and their implications for social mobility. We specify a model of educational choice, explicitly including expectations about earnings, financial, and non-pecuniary factors. Our estimation strategy exploits panel survey data on young people's expectations about key outcomes both at, and after, university, linked to their realised outcomes. Income maximisation, despite its prevalent role in the literature, is only a small part of the story: other factors are four times as important as earnings in determining whether someone goes to university. Non-pecuniary factors also drive both the SES-gap in educational attainment, and the huge growth in degree attainment between the 1980s and 2010s.
    Keywords: Higher education, Earnings, Psychic costs, Wage premium, Educational choice
    Date: 2021–05–24
  8. By: Ginevra Buratti (Bank of Italy); Alessio D'Ignazio (Bank of Italy)
    Abstract: We investigate whether targeting algorithms can improve the effectiveness of financial education programs by identifying the most appropriate recipients in advance. To this end, we use micro-data from approximately 3, 800 individuals who recently participated in a financial education campaign conducted in Italy. Firstly, we employ machine learning (ML) tools to devise a targeting rule that identifies the individuals who should be targeted primarily by a financial education campaign based on easily observable characteristics. Secondly, we simulate a policy scenario and show that pairing a financial education campaign with an ML-based targeting rule enhances its effectiveness. Finally, we discuss a number of conditions that must be met for ML-based targeting to be effectively implemented by policymakers.
    Keywords: financial education, machine learning, policy targeting, randomized controlled trials
    JEL: C38 I21 G5
    Date: 2023–04

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