The Economics of Education: A Comprehensive Overview

The Economics of EducationA Comprehensive OverviewSecond EditionEdited bySteve BradleyColin Green?
Copyright
Contributors
Foreword
	Section 1: Methods and overview
	Section 2: Private and social returns to education
	Section 3: Production, costs and financing
	Section 4: Teacher labour markets
	Section 5: Education market, choice and incentives
	Final comments
1. Empirical methods in the economics of education
	Introduction
	From correlation to causation
	Explicit randomization
		Randomized controlled experiments
		Lotteries of oversubscribed programs
	Natural experiments
		Instrumental-variable approach
		Regression-discontinuity approach
	Methods using panel data
		Difference-in-differences approach
		Fixed-effects approach
	Conclusions
	References
2. Behavioral economics and nudging in education: evidence from the field
	Behavioral economics of education
		Self-control
		Limited attention and cognitive ability
		Loss aversion
		Default bias
		Social preferences
		Biased beliefs
	Education interventions involving nudging
		Defaults
		Framing
		Peer group manipulations
		Deadlines
		Goal setting
		Reminders
			Reminding students
			Reminding parents and teachers
		Informational nudges
			Parental information
			Information about behavior and ability
			Returns to schooling
			Financial aid and assistance
		Boosting skills to alleviate self-control problems
		Social comparison nudges
		Social belonging, identity activation and mindset nudges
	Conclusion
	References
	Further reading
3. Returns to education in developed countries
	Outline placeholder
		Glossary of terms
	Introduction
	Estimating returns to education via schooling equations
		Basic schooling equation
		Hourly wages versus measures that include hours of work
		Measurement error in schooling
		Ability bias, omitted variables and selection bias
			Include proxy measures of ability
			Twin studies
			Natural experiments based mainly on features of the education system
			Regression discontinuity methods
		Heterogeneous returns
		Annual returns, signaling, and sheepskin effects
		Non-pecuniary benefits and social benefits
	Trends and some international evidence
	Summary
	References
	Further reading
4. Returns to education in developing countries
	Introduction
	Estimation procedures
	Global estimates
	Low-income countries
	Vocational education
	Preschool
		Causality
		Cognitive ability
	Conclusions and policy considerations
	Disclaimer
	References
	Further reading
5. Returns to education quality
	Education quality and student outcomes
	Assessing the causal returns to education quality
	Benefits to attending more selective middle and high schools
	Returns to college quality
	References
6. Heterogeneity in the returns to higher education
	Introduction
	The economic value of degrees
		Estimating the college premium
		Student choice and heterogeneity in the returns to degrees
	Conclusion
	Acknowledgments
	References
7. Parental education and children\'s health throughout life
	Outline placeholder
		Glossary
	Introduction
	Theoretical considerations
		Immediate effects of education
		Intergenerational effects of education
	Insights across children\'s lifecycle
		Prenatal influences and health at birth
		In childhood
		In adolescence
		In adulthood
		In late life
	Evidence from developing countries
	Implications and outlook
	References
	Further reading
8. Education and civic engagement
	The civic returns to educational attainment
	Comparisons of public and private schools
	Summary and future directions
	See also
	References
	Further reading
9. Education and crime
	Introduction
	The economics of education and crime
	Evidence on education, school quality, and crime
		Effects of educational attainment on crime
		Effects of education on female crime
		Effects of school choice and quality on crime
		Contemporaneous schooling and crime
		Brief comment on measures of criminality
	The effects of arrest and incarceration on education
	Conclusions and policy lessons
	References
10. Education and inequality
	Introduction
	Inequalities in educational outcomes
		Inequalities by social background
		Inequalities by race, ethnicity and immigrant status
		Inequalities by gender
	Education and economic outcomes
		Changes over time
	Conclusions
	References
11. Race earnings differentials
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		Glossary
	Race and ethnic earnings differences in the United States
	A model for explaining earnings differences
	Explaining earnings differences with cross-section data
	Earnings differences for minority women
	Do ability/educational quality differences explain race/ethnic earnings differences?
	What are the sources of the black/white test-score gap?
	Explaining changes in earnings differences over time
	Comparing results for Brazil and Israel
	See also
	References
12. The economics of high school dropouts
	Introduction
	Who drops out of high school?
	What are the consequences?
	Why do students drop out?
		Individual factors
		Institutional factors
			Families
			Schools
			Community and peers
	What can be done?
	Conclusions
	References
	Further reading
	Relevant websites
13. Education production functions
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		Glossary
	Overview
	Measuring skills and human capital
	Basic production function estimates
		Measured school inputs
		Study quality
		More recent studies
	Do teachers and schools matter?
	Benefits and costs
	Some conclusions and implications
	References
	Further reading
14. Education, knowledge capital, and economic growth
	Early studies of schooling quantity and economic growth
	Early evidence on the quality of education and economic growth
	Recent evidence on the importance of cognitive skills for economic growth
	Causality in brief
	The interaction of educational quality with economic institutions
	Simulating the impact of educational reform on economic growth
	Summary
	References
15. Education production functions: updated evidence from developing countries
	Introduction
	Education in developing countries
	The education production function
	Estimation of education production functions
	Evidence of policy impacts from developing countries
		Demand-side interventions
		Supply-side policies
	Conclusions and suggestions for future research
	References
16. Schooling inputs and behavioral responses by families
	Introduction
	Conceptual framework: education production and input interactions
		Extensions
	Methodological approaches to estimation
	Empirical findings
		Factors driving heterogeneous results
		Multiple inputs and agents
		Test score impacts
	Conclusions
	References
17. The economics of early childhood interventions
	The economic rationale
		Market failures
		Equity and redistribution
		Human capital formation
	Types of early childhood interventions
	Cognitive and academic outcomes
	Noncognitive outcomes
	Indirect effects: female labor supply
	Economic returns
	Conclusions
	See also
	References
	Further reading
	Relevant websites
18. Parental socioeconomic status, child health, and human capital
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		Glossary
	Introduction
	Does parental socioeconomic status affect child health?
		External benefits of parental SES
		Evidence
			Correlation
			Causation
	Does child health affect future outcomes?
		Possible channels
		Evidence
			Conditions in utero
			Birth weight
			Nutrition
			Mental health
			Asthma
			Acute illnesses
			Environmental toxins
	Can health account for gaps in Children\'s educational outcomes?
	See also
	References
	Further reading
	Relevant websites
19. Monetary and non-monetary incentives for educational attainment: design and effectiveness
	Introduction
	Monetary incentives
		Sensitivity to cash size
	Who should be rewarded?
	Non-monetary incentives
		Types of non-monetary incentives
		Selection of non-monetary incentives
	Effectiveness of non-monetary incentives
		Non-monetary incentives for students
		Non-monetary incentives for parents and teachers
	Discussion and conclusion
	Acknowledgments
	References
	Further reading
20. Educational mismatch in developing countries: A review of the existing evidence
	Introduction
	Measurement issues
		General findings
	The degree of mismatch
	Rates of overeducation and undereducation
		Brazil
		Russia (and post-communist transition economies)
		India
		China
		Low-income countries
	Explanations for mismatch
		Introduction
		Informality
		Quality of education
		Other factors
	Consequences of mismatch
		Brazil
		Russia and post-communist countries
		India
		China
		Low-income countries
			Overeducation, job satisfaction and economic growth
	Policy, conclusions and reflection
	References
21. Peer effects in education: recent empirical evidence
	Introduction
	Recent empirical evidence
		Deliberate random assignment
		Regression-discontinuity design
		Instrumental variable
		Fixed effect
		Variance restriction
		Nonlinearity and heterogeneity
	Conclusion
	References
22. The role of teacher quality in education production
	Introduction
	Estimating teacher quality
		The value added approach
		The between subject approach
	What explains teacher quality variation?
		Individual teacher characteristics
			Teacher experience
			Teacher skills, formal training and education
		Teacher labor market variables
			Teacher wages and teacher wage systems
			Teacher unions
			Teacher mobility
	Use of teacher quality measures in pay and evaluation systems
	Summary and the way forward
	References
23. The economics of class size
	Introduction
	Why class size might matter
	Empirical approaches to studying the impact of class size
	Nonexperimental research
	Experimental research
	Checks for randomization
	Achievement results
	Additional caveats
	Quasi-experimental research
	Policy-induced variation
	Discussion
	See also
	References
	Further reading
24. School finance: an overview
	Introduction
		School finance in context
		Raising revenue: multiple and evolving roles
	Distributing resources: multiple and competing goals
		Mechanisms for distributing revenue across school districts
		Challenges to state funding systems
	Utilization of resources: current policy issues for school finance
		Teacher compensation
		Expanding the scope of educational services
	References
25. The economics of tuition and fees in American higher education
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		Glossary
	Introduction
	Tuition keeps rising in private higher education
	Tuition keeps rising at public institutions
	Graduate and professional program tuition and fees
	Concluding remarks
	References
	Further reading
	Relevant websites
26. Teacher labor markets: An overview
	Introduction
	Constrained teacher labor markets
	Methodological challenges
	Recruiting effective teachers
	Retaining effective teachers
	Developing an effective teacher workforce
	Looking forward
	References
27. Teachers in developing countries
	Introduction to review of literature on teachers in developing countries
	Methods for literature selection and categorization
	Analysis of teacher interventions that increase time in school
		Impacts of teacher inputs on time in school
		Impacts of pedagogy interventions on time in school
		Impacts of teacher-related governance interventions on time in school
	Analysis of teacher interventions that improve learning outcomes
		Impacts of teacher inputs on learning
			Computer-assisted learning
			Pupil-teacher ratio
			Literacy programs with teacher training
			Longer school days
			Unique interventions
		Impacts of pedagogy interventions on learning
			Teaching at the right level, remedial education, tutoring
			Tracking
			Teacher training with materials/curriculum
		Impacts of teacher-related governance interventions on learning
			Teacher performance pay
			Contract teachers
			Teacher monitoring and diagnostic feedback provided to teachers
			Multi-dimensional teacher interventions
	Analysis of interventions that improve teacher outcomes
		School input interventions
		Pedagogy interventions
		Governance interventions
			Teacher performance pay
			Contract teachers
			Teacher monitoring and diagnostic feedback
			Multi-dimensional teacher interventions
	Conclusion
	References
28. Teacher supply
	The labor market for teachers
	The demand for teachers
		The supply of teachers
		Teachers’ pay
	Summary
	References
	Further reading
29. Economic approaches to teacher recruitment and retention
	Introduction
	The supply of teachers
	Wages
	Working conditions
	Psychic benefits and costs
	School location
	Barriers to entry
	The demand for teachers
	Student enrollment and teacher retirement
	Reduction in student-to-teacher ratios
	Hiring processes
	Institutional constraints
	Recruitment and retention policies to date
	Partnerships between districts and local colleges
	Monetary incentives
	Changes in entry requirements
	Teacher induction and mentoring
	Performance-based pay
	Career differentiation through ladders
	Improving hiring practices
	Reform of due process
	Conclusion
	See Also
	References
	Further reading
30. Compensating differentials in teacher labor markets
	Compensating wage differentials through empirical studies using hedonic wage regression
		Method
		Data
		Findings
	Compensating wage differentials through empirical studies of teacher attrition and retention
	Compensating wage differentials using policy interventions
	Quasi-experimental evidence
	Random assignment evidence
	Findings and future directions
	References
31. Teacher incentives
	Background on incentive programs
	Advantages of incentive programs
	Individual incentives Efficiency and productivity
		Recruitment and retention of qualified teachers
	Group incentives Efficiency and productivity
	Summary of key findings
	Disadvantages and criticisms
	Adverse and unintended consequences of teacher incentive programs
	Conclusions
	See also
	References
	Further reading
32. The economic role of the state in education
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		Glossary
	Constructing education systems
	Economics and the State\'s role
		Is education a public good?
	Market failure in the market for education
		Externalities
		Information asymmetry
		Uncertainty and risk aversion
		Economies of scale
	Equity and equal opportunity
	Critique of state provision
	Public choice and government failure
		Inefficiency in production
		Inequity in opportunities and outcomes
		Standardization and enforced mediocrity
		Rent-seeking and corruption
	A role for the state?
	Education and the shrinking state
	See also
	References
33. Quasi-markets in education: the case of England
	Introduction
	How could markets in education operate?
		Alternative approaches
		Quasi-markets in England
			The supply side
			The demand side
			Regulation and monitoring of schools
			Test score outcomes
		Evaluating the effects of Quasi-markets on educational outcomes
			Does the market operate?
			The effect of competition between schools
			Do parents actually exercise choice and does this make a difference to test score outcomes?
			Do market forces lead to inequality or segregation?
		The effects of complementary and contradictory educational policies
		Conclusions and future research
	References
34. Tiebout sorting and competition
	Residential mobility, capitalization and household preferences for education
	Tiebout sorting and the rationing of school inputs
	Tiebout competition to enhance productive efficiency
	A partial divorce between competition and tiebout
	Conclusion
	References
35. Economic approaches to school efficiency
	Introduction
	Models of efficiency
		Data envelopment analysis
		Stochastic frontier analysis
	More advanced models
		Non-parametric models
			Metafrontiers
			Malmquist indices
			Revenue efficiency models
			Network DEA models
		Parametric models
			Causality
			Panel data models
			Transitory and permanent inefficiencies
			Network SFA
	Conclusions
	References
36. School competition and the quality of education
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		Glossary
	Introduction
	Empirical evidence
		England
		US
		Sweden
	Chile
	Conclusions
	References
37. The economics of catholic schools
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		Glossary
	Introduction
	Overview
		History and enrollment
		Teachers
		Students
		Location
		Tuition and costs
		Market served
		School practices
		Vouchers
		Catholic schools in other countries
		Demand
	Effects
		Academic achievement and educational attainment
		Bad behavior
		Civic participation and altruism
		Economic effects
		Other effects
		The effect of catholic school attendance in other countries
	Conclusions
	See also
	References
	Further reading
	Relevant websites
38. Private schools: choice and effects
	Introduction
	Theory
	Evidence on choice
	Evidence on effects
		Methods
		Findings
	Conclusion
	References
39. The economics of charter schools
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		Glossary
	Introduction
	Policy questions
	What types of students do charter schools serve?
	Are charter and traditional schools receiving comparable funding?
	How do charter schools affect the performance of charter students?
	Is charter school competition improving the performance of traditional public schools?
	Conclusion
	References
40. The economics of vocational training
	Introduction
	Costs and benefits of training investments for firms
		Why firms pay for general training
		Costs and benefits of apprenticeship training
		Cross-country comparisons
	Benefits of apprenticeships for individuals
	Fiscal returns to apprenticeship training
	Conclusions
	References
41. Student incentives
	Introduction
	Student incentives in K-12 education
		Financial incentives
		Non-financial or mixed incentives
	Incentives in developing countries
	Teacher incentives in K-12 education
		Individual teacher incentives
		Group incentives for teachers
		Teacher-student aligned incentives
	Higher education incentives
		Scholarships, grants, and cash awards
		Student loans
	Conclusion
	References
	Further reading
42. The economics of school accountability
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		Glossary
	The rationale for school-based accountability
	Designing school accountability systems
	The evidence on student achievement
	Evidence on unintended consequences
	References
	Further reading
Index
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