Edited by Geraint Johnes, Jill Johnes, Tommaso Agasisti and Laura López-Torres
Geraint Johnes, Jill Johnes and Laura López-Torres
The evaluation of the returns to investments in human capital has been at the core of the economics of education since the seminal work of Theodore Schultz published in 1961. The most significant methodological advances have come in parallel with more general developments in applied microeconometrics, such as the particular interest in issues of causality and unobserved heterogeneity. The new empirical findings document a widespread decline in rates of return to education over time. In this chapter we review some developments and present new international comparative results on the heterogeneity of returns to education. Apart from reviewing endogeneity and heterogeneity issues, we also pay attention to the main findings on return to early years education and returns to overeducation.
Daniel Santín and Gabriela Sicilia
Targets and tools for the monitoring and evaluation of educational policies and schools have changed rapidly in the last 20 years. On one hand, education literature has concluded that the gold standard for measuring the true causal impact of educational interventions is randomised controlled trials. On the other hand, although impact evaluation is the mainstream for evaluating educational programmes targeted at individual level, when programmes are intended for organisations it also becomes relevant for benchmarking to measure educational efficiency and total factor productivity changes of schools by means of production frontiers. Surprisingly, to date in the economics of education, both fields of research; impact evaluation and production frontiers, run as parallel lines with scarce relationship between them. In this chapter we develop a theory to relate impact evaluation and production frontiers using the well-known education production function framework introducing the idea of a By-Group Malmquist index. To illustrate its potential, we run a Monte Carlo analysis simulating different educational policies, or treatments, to show how production frontiers can help to enhance the traditional impact evaluation. Our results show that successful policies for raising schools’ productivity can be hidden in the causal inference analysis if we only consider mean output differences between the treated and the control groups. In these cases, the treatment effects are better measured regarding total factor productivity changes because it allows us to measure efficiency and technology changes determined by best practices detected through production frontiers.
Kristof De Witte and Florian Tomini
This chapter discusses the implications of inequalities in education and the role of education as a cure for disadvantages. We show that countries with the highest regional Gini coefficient are the countries with the lowest average participation rates of four-year-old children, and the Gini coefficient correlates negatively with the percentage of population in education. Next, we discuss some measures and interventions used to tackle inequalities. We focus both on early childhood education and care, and specific interventions in primary and secondary education. In particular, we discuss the influence of peer effects, early tracking and smaller classes.
Edited by Geraint Johnes, Jill Johnes, Tommaso Agasisti and Laura López-Torres
Labour market polarisation involves a decline in the share of intermediate-skilled jobs in the labour market, with a corresponding growth in the share of both low-skill and high-skill jobs. This phenomenon has been observed in a range of countries and time periods. This chapter summarises currently available evidence on the existence of polarisation, and then provides a discussion of why polarisation has occurred. This discussion focusses on technological change, offshoring, international trade and provision of ‘home production’ services as potential explanations, and the evidence for each. Technological change that is ‘task-biased’, in the sense that it is replacing labour in jobs involving routine, repetitive tasks, emerges as a key explanation for polarisation, given that routine tasks are typically found in intermediate-level jobs, for example, administrative and skilled manual work. Given this, the chapter concludes with a discussion of the implications of such polarisation for education. It is argued that despite the declining share of jobs originally classified as intermediate, it is still important for countries to provide, and young people to acquire, intermediate-level qualifications, primarily via vocational and technical education. Although older intermediate-level jobs are disappearing, new ones are emerging, involving tasks complementary to, rather than substituted by, the new technology. Furthermore, education remains one of the primary determinants of progression to higher-level jobs.
Ray Bachan and Barry Reilly
The pay of university heads (vice chancellors, rectors, provosts, principals, directors and presidents) has attracted international interest over the last decade particularly in some large developed economies. The pay awards granted to university heads has, in some cases, attracted adverse public comment in a landscape characterised by rising tuition fees and cuts in public funding. This chapter considers the extent to which such pay awards are associated with university performance measures based around institution mission and financial probity using an individual fixed effects strategy based on UK data covering academic years 1998/99 to 20014/15. This yields a sample containing 1,583 observations on 254 VCs over 17 years. No study to date has availed of such rich data and the period reviewed covers some important changes within UK higher education. Our empirical findings suggest that VCs are paid in accordance with the size of the institution they manage and there is some evidence of tournaments influencing VC pay. These results resonate with the existing international empirical literature on this topic. Moreover, we find that, in the UK VCs are rewarded for observable mission-based performance measures. Specifically, our results suggest that success in widening participation for students from the lower social classes and areas with low university participation exerts a positive effect on VCs’ pay. Securing income flows from university funding council grants also impacts positively on their remuneration. However, these results are found to differ according to university type. Further, even after controlling for a rich array of observable and unobservable factors, there have been sizeable increases in real pay in recent years that cannot be readily explained.
Adriana Di Liberto
Due to the recent emphasis towards a ‘decentralization, autonomy and accountability’ model, it is widely believed that school leadership and high quality school management is one of the keys for a successful school. Despite that, few quantitative studies address whether school leadership activities affect student performance, since providing reliable quantitative measures of school management effectiveness is not an easy task. In this survey we review the different alternative methodologies and the main findings suggested by the literature. Overall, the existing results find that the quality of principal activities is positively related to student outcomes. These studies also find substantial heterogeneity in managerial practices across schools and countries. More work should be done on these issues in order to better understand how exactly school management affects students learning and to identify the best policies that improve principals’ effectiveness.
Patrice Iatarola and Leanna Stiefel
Reducing high school size is a popular policy in many large US school districts where high school graduation rates are low. Particularly in urban areas, the traditional large comprehensive high school increasingly has been unable to serve the needs of students at risk of educational failure who are predominantly racial and ethnic minority students as well as low income. In this chapter, following an historical review of three waves of small school reform efforts, we present theoretical and conceptual frames to orient theories of change, examine costs of reform, and assess system-wide effects. Early pre-2010 research studies, while plentiful, are largely correctional and ignore issues of selection that could bias findings. With advances in micro-level data availability as well as better designed analytic models, the rigor of research has grown. For example, recent studies that draw on school lotteries provide evidence that small schools lead to better student outcomes. These findings are supported by other rigorous research that captures heterogeneities between the earlier small schools and more recent ones. On the cost size, evidence dates back to the 1960s rooted in economic cost function research suggesting that the costs of small schools follows a typical U-shaped average cost curves, with a variety of cost minimizing sizes of schools. The next generation of cost research, still rooted in economic perspectives, suggests that there are economics to larger schools and that these differ across educational level and depend on how schools are utilized. The last wave of research on costs advanced both in terms of data and perspective such that costs were brought together with effects to shed light on whether investments in small schools were worth their extra costs in relation to effects. The evidence suggests that they are worthwhile investments though the rigour of the cost studies has not kept paste with that of the effects. Lastly, from our review there appears to be some positive systemic effects where students in both small and large schools have gains in achievement following significant small school reform.
Already four in five OECD countries allow government-dependent private schools and independent private schools to provide compulsory education and that opportunities for school choice have generally expanded over the last 25 years. For an up-to-date overview of the school choice literature, this review first sets out the main theoretical considerations, using the evaluative framework outlined in Levin (2002) and then evaluates the growing empirical literature on school choice. Different effects of school choice expansion have been hypothesised, and empirically corroborated, within each of the following dimensions: freedom of choice, productive efficiency, equity and social cohesion. The results depend strongly on how a programme is designed in terms of finance, regulation and support services. Whereas freedom of choice is generally improved by expanding choice, empirical results point out that the range of choices might only marginally increase for households facing financial, residential, transportation, eligibility and/or information constraints. Regarding productive efficiency gains, results are modestly positive for the potential of competition to increase overall average achievement. The most promising results for choice are found when the alternative is a low-performing neighbourhood school. A well-designed targeted choice plan can improve educational equity, but large-scale choice systems, particularly those that allow for funding disparities, are generally found to exacerbate existing inequities. Empirical research on social cohesion is still scarce, yet by shifting the power over the school from policymakers to households, there are reasons to believe that school choice expansion can come at the expense of social objectives of education.