Municipal and private sector response to decentralization and school choice

A large number of developing nations are in the process of decentralizing basic education, with the aim of diversifying revenue sources and introducing greater accountability and efficiency. This is especially true in Latin America, where Chile introduced the first significant reform in 1981. This reform kept most of the responsibility for educational finance with the Ministry of Education but transferred the responsibility for delivering services to municipalities and non-profit, private schools. In response to this reform, municipalities increased their finance of public schools, and the supply of subsidized private education increased dramatically. By 1990, enrollment in subsidized private schools represented about one-third of total primary-secondary school enrollments. This paper examines the effects of the reform. Municipal finance, which is closely tied to municipal fiscal capacity, has created inequities in school expenditures even though it represents only 10% of total revenues. Variations in the private school market share across municipalities are principally explained by the ease of market entry, family socioeconomic status, and the relative performance of public and private schools; this model does not offer a satisfactory explanation of the growth in private school enrollments in Chile over time. The effect of the reform on cost-effectiveness is ambiguous. Ministry of Education non-teacher employment declined by over half, while cognitive tests also declined. There is some evidence that the growth in private school enrollments may have improved overall efficiency since private schools are found to be slightly more cost-effective than public schools.     

The effects of school quality on long-term health

In this paper I estimate the relationship between school quality and mortality. Although many studies have linked the quantity of education to health outcomes, the effect of school quality on health has yet to be examined. I construct synthetic birth cohorts and relate the quality of education they attained to their mortality rates. I find that there is a statistically significant relationship between the mortality–schooling gradients, which depict the return to a year of schooling, and the length of school term and relative teacher wage. For instance, increasing the relative teacher wage by one standard deviation results in about 1.9 less deaths per 1000 people per extra year of education. My results suggest that one way to improve the health of the population is to improve school quality.     

The effectiveness and retention of teachers with prior career experience

As schools and districts seek to recruit teachers, individuals in non-teaching professions are an appealing possible pool. These potential teachers come with work experience and may have expertise that would serve them well in the classroom. While there has been substantial rhetoric assailing the virtues of teachers with prior professional experience, no research that we know of has assessed the effectiveness of these teachers in terms of student learning. This study uses data from New York City to assess the relative effectiveness and retention of career-switchers. It provides some evidence that these teachers are no more effective than other new teachers, and, in fact, they appear to be less effective at raising math scores of elementary and middle school students. There is little difference in overall transfer or leave rates between teachers with prior experience and other teachers, although career-switchers from college recommended programs do appear more likely to transfer schools.     

Returning to school for higher returns

On the basis of those respondents in the National Longitudinal Survey of Youth (NLSY) who change jobs with an intervening period of education reinvestment, the conventional assumption of linearity of log wages in years of schooling is strongly rejected: a typical reinvestment for the 1980 through 1993 period is associated with a rise of about 3.5 percentage points in the estimated return to an additional year of schooling. The estimated marginal rate of return generally rises in the former education level, and reaches the maximum at 15 years of the former level (therefore 16 years of education after reinvestment), where an additional year of investment is associated with a rise in real hourly rate of pay by approximately 20%. Evidence also shows that, while the level of individuals’ risk tolerance affects significantly the probability of returning to school, correcting for sample selectivity makes little difference in the results. Findings in the current paper survive a variety of robustness tests. The current cohort-based evidence is more helpful than existing evidence from cross-sectional data to individuals making schooling decisions.     

What determines the return to education: An extra year or a hurdle cleared?

The 1973 Raising of the School Leaving Age from 15 to 16 has been used to identify returns to years’ schooling. However, because the first set of “high stakes” exams are taken in the UK at age 16, the reform affected the proportion with qualifications, as well as schooling length. In order to shed light on whether the returns reflect the extra length of schooling or the increase in qualifications, we exploit another institutional rule – the Easter Leaving Rule – which we argue only affected the probability of obtaining qualifications (and not the length of schooling). We find sizeable returns to academic qualifications – increasing the probability of employment by 40% points – and our results suggest that qualifications drive most of the returns to education.     

Which children benefit from non-parental care?

This paper investigates the relationship between non-parental care and toddlers’ behavioral outcomes using data from Australia. In particular, we explore heterogeneity in the relationship using the unique data on quality attributes: carer/child ratio, share of qualified staff, and expert ratings. The results suggest that full-time non-parental care, particularly center care, is negatively associated with toddlers’ behavioral outcomes. The negative association is however mitigated when centers have a larger number of carers per child. The negative association between non-parental care and behavioral outcomes also appears to be larger for children with better-educated parents.     

Do colleges cultivate critical thinking, problem solving, writing and interpersonal skills?

We investigate how much value college enrollment adds to students’ critical thinking, problem-solving and communication skills, and the role college inputs play in developing these competencies, using data from a 2009 collegiate assessment pilot study in Colombia. Relative to observationally similar first year students, students in their final year of college score about half of a standard deviation higher, with statistically significant higher scores on every individual component of the test. Sensitivity analyses indicate that results are robust to validity threats posed by selection bias. Students in private colleges exhibit significantly higher overall test score differences. Measures of college quality such as selectivity, rankings based on reputation, share of faculty with PhD, share of full-time faculty and expenditures per student, however, are not meaningfully associated with higher test score differences between last and first year students.     

Do local contributions affect the efficiency of public primary schools?

Are public schools that rely on local resources for a greater share of their financing more cost-effective? Could financial decentralization lead to more efficient schools? This paper attempts to answer these questions using cost, financial sources and student achievement data from Philippine primary schools, which are financed primarily from central sources but which also raise funds from other sources, to differing degrees. It concludes that schools which rely more heavily on local sources, such as contributions from the local school board, municipal government, parent-teacher associations (PTA) and other sources are more efficient—i.e. have lower cost, holding constant for enrollment and quality. A 1% increase in the share of financing coming from local sources will lead to a decline in total costs of 0.135%, or about the cost of providing for a place for one more student.     

Measuring the impact of competition in local government education markets on the cognitive achievement of students

In this paper, the role of interjurisdictional competition among school districts is examined. Using 1970 California school district data and controlling for a variety of education inputs, achievement scores are found to rise as the local education market becomes more competitive. This relationship continues until a competitive threshold is reached, beyond which additional districts have no impact on achievement. It is estimated that three to four school districts per county are necessary to create a competitive market in education. These findings are consistent with similar studies examining the effect of entry in the private sector. Additionally, the results show a variety of parental, school and student inputs to be significant in “producing” student achievement.     

Norms as a tool of analysis in the economics of education: A contribution of Massy and Zemsky

This paper suggests how Massy and Zemsky's concept of decision-making norms has promise as a tool to support the modeling of economic choices within educational organizations. This concept's practical value would be supported by: analysis of how informational economies are achieved through the delegation of certain relatively routine decisions reflected in norms to administrative personnel; developing criteria for inferring whether observed deviations from decision-making norms are permanent or transitory; and, most important, the development of informationally efficient mechanisms for making norms forward looking in terms of changes in the environment affecting the organization's productivity and financing.     

Attendance, schooling quality, and the demand for education of Mexican Americans, African Americans, and non-Hispanic whites

This study examines the influence of the opportunity costs of school attendance, educational quality attributes, and household socioeconomic status on the educational demand of Mexican Americans, African Americans, and non-Hispanic whites using the 1988–1990 surveys of the National Education Longitudinal Study. Implementing a utility-maximizing framework, educational demand assumes the form of schools' average daily attendance rates and student dropout decisions between the 8th and 10th grades. The basic results suggest that a school's attendance rate is sensitive to educational quality and student characteristics. Moreover, the demand for education measured by student attrition inversely relates to unexplained school attendance, and is positively affected by household socioeconomic status. Some policy recommendations based on the results are discussed.     

Overeducation in developing economies: How can we test for it, and what does it mean?

A worker is said to be overeducated if he/she has acquired more education than is required to perform his/her job. In the absence of data measuring the number of years of schooling required to perform particular jobs, we propose a new approach to testing for overeducation. Overeducation is confirmed if we observe that education levels rose in jobs that offer very low returns to education and that underwent little technological change. Using labor force surveys from four developing countries, we find evidence of overeducation in unskilled jobs in the Philippines, mild evidence in Mexico, and little evidence in India and Thailand. We show that a job's mean and modal years of schooling are poor proxies for required education. We also show that overeducation sometimes increases within unskilled jobs, even while a growing share of educated workers enter skilled jobs. This may be because the quality of education segments the labor market.     

Finance, management, and costs of public and private schools in Indonesia

This paper investigates the impact of public vs private finance of education and public vs private management of schools on school cost and efficiency, using school-level data on revenues, expenditures, enrollments, examination scores and student characteristics from Indonesian primary schools. We find that in Indonesia, where schools generally operate at very low funding levels, more money is likely to bring better school quality. Private management is more efficient than public management in achieving academic quality. Private funding also improves efficiency whether the schools are publicly or privately managed, but the incremental effect declines as the local funding share increases.     

Private education in a poor country: The case of urban Bolivia

Investment in education is critical for economic growth and poverty alleviation. Such investment is typically being financed by the state. Yet in many countries families contribute privately to the education of their children. In an era of stagnating public budgets for education (and practically anything else), the private financing of education gains importance for a country's investment in human resources to be maintained. It is often claimed that private education is highly selective and afforded only by the rich. In this paper we examine the extent of private expenditure on education in a country that is among the poorest—Bolivia. In the empirical analysis we use data from both the 1990 and 1992 household surveys (Encuesta Intergrada de Hogares). The results show that there is a remarkable willingness of households in Bolivia to pay for private education for their children.     

Economics of education: A research agenda

The paper presents a systematic taxonomy of research areas in the economics of education and gives a number of key topics that deserve more research attention in the future. Emphasis is put on documenting the unit cost of education at different schooling levels and curriculum types, along with the learning and earning outcomes of education. Evidence on the costs and benefits, from both the private and the social point of view, can lead to efficiency and equity assessments of an educational system. Among topics where the research effort should be intensified are the screening hypothesis, measuring education externalities and the quality of schooling.     

Public spending on higher education in developing countries: Too much or too little?

This paper discusses problems with the prevalent view that public resources for education in developing countries should be reallocated from higher to lower levels of education. There may be a case for maintaining and even increasing spending on higher education, as long as public funds can be directed to research and other “public good” functions of institutions of higher education. Current measures of social returns to primary, secondary and higher education do not reflect unmeasured social benefits at each level; since we do not know the relative size of these benefits across levels, we do not know the true ranking of social returns across primary, secondary and higher education. The true social rate of return to certain components of higher education, such as research and postgraduate training in science and technology, and creation of other skills where social returns probably exceed private returns (such as public administration) is probably high, and in some settings, may now be as high or higher than the social rate of return to primary and secondary education. Moreover, achieving and sustaining adequate levels of quality to capture these social returns requires minimal stability in public financing, arguing against major reallocations away from higher education. But this does not argue for more public spending on all higher education programs. On the contrary; within the envelope of total public spending on higher education, reallocation away from public spending on undergraduate training makes sense, since such training probably has low social compared to private returns, and can be accomplished by greater reliance on private universities and by increasing tuition and other fees in public universities, while ensuring equitable access through loan and scholarship programs.     

A utility model for teaching load decisions in academic departments

The authors model the class size and teaching load decisions of academic departments in terms of a departmental utility function. Utility is postulated to be asymmetric around class size and teaching load norms, and variables for curricular structure, disciplinary domain, and institutional type are taken into account. Maximization of the utility function produces decision rules for the number of sections to be offered for each course, and hence the faculty's overall teaching load. A nonlinear estimator is developed for the decision rules' parameters and applied to data from four liberal arts colleges and two research universities. Results are consistent with theories about faculty discretionary time and with expectations about the effects of curricular structure on class size. The paper concludes with a discussion about the effects of enrollment uncertainty on faculty load decisions.     

Teacher salaries in Latin America: A review

In this paper we use data from household surveys of 12 Latin American countries to assess how teacher salaries compare to workers in other occupations. The results show great variability from one country to another, ranging from an apparent underpayment of teachers in Bolivia by 35% relative to the control group, and a respective overpayment of 65% in Colombia. However, when statistical controls are introduced for the differential education, hours worked and gender composition between teachers and the comparison group, much of the earnings differential between the two groups disappears. On the basis of this finding, we cannot support the position that teachers are either overpaid or underpaid.