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on Sociology of Economics |
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Issue of 2008‒02‒02
three papers chosen by Jonas Holmström Swedish School of Economics and Business Administration |
| By: | O Debande; Vincent Vandenberghe |
| Abstract: | The arguments for refinancing the European Union's (EU) higher education via higher tuition fees largely rest on preserving the profitability of the educational investment and offering deferred and income-contingent payments. Using income survey datasets on Belgium, Germany and the United Kingdom (UK) we first estimate how graduates' private return on educational investment is likely to be affected by higher private contributions. We then evaluate the effect of income-contingent and deferred payment mechanisms on lifetime net income and its capacity to account for graduates' ability to pay, considering numerous ways of financing the cost of introducing income-contingency. Our analysis reveals that increasing individuals' contributions to higher education costs, through income-contingent and deferred instruments, does not significantly affect the private rate of return of heterogeneous graduates, allows for payments to be indexed to ability to pay, and can be implemented in ways that minimize the risk of adverse selection. These findings prove robust to significant variations between countries' unharmonised higher education institutional structures. |
| Keywords: | Higher Education Finance, income-contingent loans, risk pooling and risk shifting |
| JEL: | I28 H52 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:/124&r=sog |
| By: | Toole, Andrew A.; Czarnitzki, Dirk |
| Abstract: | When academic researchers participate in commercialization using for-profit firms there is a potentially costly trade-off – their time and effort are diverted away from academic knowledge creation. This is a form of brain drain on the not-for-profit research sector which may reduce knowledge accumulation and adversely impact long-run economic growth. In this paper, we examine the economic significance of the brain drain phenomenon using scientist-level panel data. We identify life scientists who start or join for-profit firms using information from the Small Business Innovation Research (SBIR) program and analyze the research performance of these scientists relative to a control group of randomly selected research peers. Combining our statistical results with data on the number of university spin-offs in the U.S. from 1994 to 2004 we find the academic brain drain has a nontrivial impact on knowledge creation in the not-forprofit research sector. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:6892&r=sog |
| By: | Brunello, Giorgio (University of Padova); De Paola, Maria (University of Calabria); Scoppa, Vincenzo (University of Calabria) |
| Abstract: | Economists have a poor understanding of the mechanisms underlying reduced-form college peer effects. In this paper we explore a candidate mechanism, the provision of school effort. We show that, when earnings reflect individual educational performance as well as the field of study selected at college, and individual effort is a function of expected earnings, the size of the peer effect varies by field. Using data from a middle-sized public university located in Southern Italy and exploiting the random assignment of first year students to college accommodation, we find evidence that peer effects are positive and statistically significant for students enrolled in the fields of Engineering, Maths and Natural Sciences – which are expected to generate higher earnings after college – and not different from zero for students enrolled in the Humanities, Social and Life Sciences, which give access to lower payoffs. An implication of our model is that shocks affecting college wage premia may alter the size of peer effects. |
| Keywords: | optimal effort, fields of study, Italy, random assignment, peer effects |
| JEL: | I21 Z13 J24 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3277&r=sog |