long term intergenerational persistence of human capital an empirical analysis of four generations most previous studies of intergenerational transmission of human capital are restricted to two generations how parents influence their children in this study we use a swedish data set that links individual measures of lifetime earnings for three generations and data on educational attainment for four generations we find that estimates obtained from data on two generations severely underestimate long run intergenerational persistence in both labor earnings and educational attainments long run social mobility is hence much lower than previously thought we attribute this additional persistence to dynastic human capital the influence on human capital of more distant family members than parents

balanced and unbalanced growth abstract a model is developed that shows how two sectors or regions interact out of steady state through product labor and capital markets and how if the former interaction dominates the growth of one sector pulls along the growth of the other while if the latter interactions dominate one sector or region booms while the other declines it is then shown why liberalization of foreign trade should lead to a transition from a lower to a higher steady state growth rate and why during the course of this transition growth might initially be even slower than before liberalization

early tracking and the misfortune of being young recent research suggests that the relative age of a student within a grade has a causal effect on educational achievement and that this effect fades with the duration of schooling in this study we estimate the causal relative age effect on track choice in austria a country where students are first tracked in grade 5 at the age of 10 years and again in grade 9 we find a strong positive relative age effect on track choice in grades 5 8 the age effect persists beyond grade 8 for students from less favorable socioeconomic backgrounds and students in urban areas

erratum to balanced and unbalanced growth journal of development economics 53 1997 41 66 abstract a model is developed that shows how two sectors or regions interact out of steady state through product labor and capital markets and how if the former interaction dominates the growth of one sector pulls along the growth of the other while if the latter interactions dominate one sector or region booms while the other declines it is then shown why liberalization of foreign trade should lead to a transition from a lower to a higher steady state growth rate and why during the course of this transition growth might initially be even slower than before liberalization

management of bureaucrats and public service delivery evidence from the nigerian civil service we study how the management practices bureaucrats operate under relate to the quantity and quality of public services delivered we do so exploiting data from the nigerian civil service for 4700 public sector projects we have hand coded independent engineering assessments of project completion rates and delivered quality we supplement this with a survey eliciting management practices for bureaucrats in the 63 civil service organizations responsible for these projects building on bloom and van reenen 2007 management practices matter a one standard deviation increase in bureaucrat s autonomy signi cantly increases project completion rates by 18 a one standard deviation increase in practices related to incentives monitoring of bureaucrats signi cantly lowers project completion rates by 14 we show the negative impacts of incentive provision monitoring arise because bureaucrats multi task and incentives are poorly targeted and because these management practices capture elements of subjective performance evaluation that leave scope for dysfunctional responses from bureaucrats to support a causal interpretation of our ndings we document the determinants of management practices and examine channels through which organizations might endogenously adjust management practices our results provide novel insights into how changes in how bureaucrats are managed can have potentially large impacts on public service delivery in a developing country context jel classi cation j33 j38 o20

recruiting smarter teachers in recent years many states have raised teacher salaries to attract more capable teachers since teacher labor markets are typically in a state of excess supply success of such policies is contingent on containing perverse feedbacks which arise among exit decisions vacancy rates and the willingness of prospective teachers to invest in occupation specific human capital using sat scores as a measure of ability we find that an across the board raise produces modest improvements in the work force at best indeed under plausible parameter values it is possible for mean ability to decline

the headmaster ritual the importance of management for school outcomes a the role of school principals largely resembles that of corporate managers and the leadership they provide are often viewed as a crucial component for educational success we estimate the impact of individual principals on various schooling outcomes by constructing a principal school panel data set that allows us to track individual principals as they move between schools we find that individual principals have a substantive impact on school policies working conditions and student outcomes particularly students who attend a school with a one standard deviation better principal receive on average 0 12 standard deviations higher test scores despite having very rich background information on principals it is difficult to determine which principal characteristics that form the basis for successful school management we also find a somewhat mixed picture on what management style characterizes a successful principal we further show that the scope for principal discretion for better or for worse is larger in small schools in voucher schools and in areas with more school competition

the effect of salaries and opportunity costs on duration in teaching evidence from michigan this paper demonstrates that salaries and opportunity costs have important influences on how long teachers stay in teaching the empirical work is based on a new longitudinal dataset providing information on the careers of 7800 michigan public school teachers the generalized least squares estimation technique accommodates censored observations time varying covariates and fixed effects one implication of the result is that predictions from the current generation of teacher supply and demand models are likely to be misleading copyright 1989 by mit press

managerial practices and student performance we study the effects of managerial practices in schools on student outcomes we measure managerial practices using the world management survey a methodology that enables us to construct robust measures of management quality comparable across countries we find substantial heterogeneity in managerial practices across six industrialized countries with more centralized systems italy and germany lagging behind the more autonomous systems canada sweden united kingdom and united states for italy we are able to match organizational practices at the school level with student outcomes in a math standardized test we find that managerial practices are positively related to student outcomes the estimates imply that if italy had the same managerial practices as the united kingdom the best performer it would close the gap in the math oecd pisa test with respect to the oecd average we argue that our results are robust to selection issues and show that they are confirmed by a set of iv estimates and by a large number of robustness checks overall our results suggest that policies directed at improving student cognitive achievements should take into account principals selection and training in terms of managerial capabilities

long term effects of class size this article evaluates the long term effects of class size in primary school we use rich data from sweden and exploit variation in class size created by a maximum class size rule smaller classes in the last three years of primary school age 10 to 13 are beneficial for cognitive and noncognitive ability at age 13 and improve achievement at age 16 most important we find that smaller classes have positive effects on completed education wages and earnings at age 27 to 42 the estimated wage effect is large enough to pass a cost benefit test

new approaches to surveying organizations the last three decades have witnessed an explosion of theoretical work on the organization of firms robert gibbons and john roberts forthcoming in parallel there has been a massive increase in access to microdata which has revealed huge dispersions in productivity for example within narrow industries like cement oak flooring and block ice the total factor productivity of plants at the ninetieth percentile is about twice that of those at the tenth percentile lucia foster john haltiwanger and chad syversson 2008 unfortunately analyzing to what extent this heterogeneity in productivity is due to management and organizational practices unmeasured inputs or other technologies has been held back by a lack of data national statistical agencies do not usually collect data on the internal organization of companies nor do firms report this in their accounts recently however social scientists have been starting to fill this gap by working closely with small numbers of individual firms e g the insider econometrics approach described in kathryn shaw 2009 or covering wide cross sections of firms e g nicholas bloom raffaella sadun and john van reenen 2009 in this paper we describe some of the tools of this research particularly bloom and van reenen 2007 henceforth bvr for measuring management and organizational practices

inequality in landownership the emergence of human capital promoting institutions and the great divergence this paper suggests that inequality in the distribution of landownership adversely affected the emergence of human capital promoting institutions e g public schooling and thus the pace and the nature of the transition from an agricultural to an industrial economy contributing to the emergence of the great divergence in income per capita across countries the prediction of the theory regarding the adverse effect of the concentration of landownership on education expenditure is established empirically based on evidence from the beginning of the 20th century in the u s

the effect of a specialized versus a general upper secondary school curriculum on students performance and inequality a difference in differences cross country analysis countries differ in their academic upper secondary school systems whereby some require their students to choose a specialization track from a set of areas typically natural sciences economic sci

does school tracking affect equality of opportunity new international evidence this paper investigates whether the interaction between family background and secondary school tracking affects human capital accumulation a widely shared view is that more tracking reinforces the role of parental privilege and thereby reduces equality of opportunities this may occur for several reasons including peer effects more talented students are gathered together teacher sorting better teachers prefer teaching better students differences in curricula academic oriented schools like the german gymnasium the french lycee the british grammar school or the italian liceo teach abilities that increase the probability of entering college and or differences in resource endowment compared to the current literature which focuses on early outcomes such as test scores at 13 and 15 years old we look at later outcomes including literacy dropout rates college enrolment employability and earnings while we do confirm the common view that school tracking reinforces the impact of family background when looking at educational attainment and labour market outcomes we do not confirm the same results when studying its impact on literacy and on the job training overall school tracking has an ambiguous effect in our sample of countries on the one hand and consistently with the previous literature tracking has a detrimental impact on educational attainment because it prevents some individuals from further progressing to the tertiary level of education the diversion effect on the other hand the curricula offered in vocational schools seem more effective in promoting further training and adult competences the specialization effect thereby reducing the impact of parental background on these two outcomes thus reducing the extent of student tracking either by raising the age of first selection or by reducing the number of tracks available may be appropriate for increasing intergenerational mobility in educational attainment but may increase social exclusion for people from disadvantaged backgrounds giorgio brunello and daniele checchi

inflation and labor market adjustment the implications of downward nominal and ex ante real wage rigidity and of wage contracting for the dispersion of relative wage changes in the presence of price inflation are examined rigidity implies that unexpected inflation will raise the variability of relative wage changes contracting implies unexpected inflation reduces variability using data on manufacturing industries for 1955 81 and on private nonfarm industries for1965 81 these hypotheses are studied the dispersion in relative wage cnanges is reduced by greater price inflation most of the reduction is a response to unexpected inflation expected inflation has little impact on dispersion these findings hold for subperiods within the sample and are robust to different choices of measures of price expectations including those of the livingston survey the survey research center household data and arma forecasts they stand in striking contrast to the commonly accepted result that price inflation is associated with greater dispersion of relative price changes they suggest that inflation reduces the ability of relative wages to signal disequilibria among labor markets this abstract was borrowed from another version of this item

assessing students equality of opportunity in oecd countries the role of national and school level policies abstractthis article analyses the relationship between equality of opportunity and the characteristics of the educational system jointly considering country and school level policies because school social environment represents a fundamental channel in shaping educational opportunities we consider all policies recorded in pisa 2012 dataset that affect the sorting of students to schools we show that including sorting policies enriches the explanation of the socio economic gradient that is the association between students performances and parental background with respect to previous studies including only country level features the negative impact of early tracking on equality of opportunity is overvalued without including other sorting policies while grouping students within school by ability increases the socio economic gradient and a greater students heterogeneity in the school reduces the gradient

incomes policy and wage differentials periodic incomes policies have by now become a feature of most western economies it has also become clear that there is a trade off between the features of an incomes policy that make it initially acceptable and the features that make it ultimately effective for example most british incomes policies of the 1970s have provided higher permissible proportionate wage increases for low wage than for high wage workers as we argue in section ii below the primary advantage and perhaps cause of such policies is that they can more readily secure the ex ante support of a majority of workers for any specified overall increase in the wage bill or inflation target if they are effective however such policies also result in the narrowing of wage differentials and this results in new problems some economists consider such wage equalization the inevitable cost that an economy must bear for the sake of an effective incomes policy others believe the arbitrary narrowing of wage differentials creates industrial relations problems that ultimately cause the incomes policy to fail in either case it is important to know how much equalization has been caused by the actual incomes policies and how this compares with what would have been expected from strictly adhered to policies in consequence the first and major part of this paper contains a simple analysis of the movement of differentials in britain in the last decade most incomes policies have been explicitly equalizing but how much equalization occurred compared with the equalization that would have occurred if the policies had been explicitly adhered to we show that the 1973 formula of 1 plus 4 per cent was associated with the full equalizing effect it implied but the 1975 6 a week was largely submerged in other changes and was associated with less than a third of the equalization implied by the formula indeed such mild equalization as occurred between 1975 and 1977 may be explained partly by the lower inflation rate which reduced that part of the inequality of instantaneous earnings that is caused by different groups of workers settling at different times of year against this higher unemployment may have been tending to increase inequality at the same time in 1974 threshold payments were associated with an effect of about one half of their predicted level the main force that offset the equalizing nature of the threshold formula and the 6 a week was we believe the pressure of employers bidding up the relative earnings of the more skilled workers having looked at the overall picture we then examine more closely which groups have gained and lost from recent changes in relative wages and what equalization has occurred within the different groups the groups are defined by occupation and by collective agreement our general conclusion is that however finely the labour force is subdivided equalization between groups has played a very small role in the overall equalization and the main changes

the economics of schooling production and efficiency in public schools n recent years public and professional interest in schools has been heightened by a spate of reports many of them critical of current school policy these policy documents have added to persistent and long standing concerns about the cost effectiveness and fairness of the current school structure and have made schooling once again a serious public issue as in the past however any renewed interest in education is likely to be short lived doomed to dissipate as frustration over the inability of policy to improve school practice sets in this frustration about school policy relates directly to knowledge about the educational production process and in turn to underlying research on schools although the educational process has been extensively researched clear policy prescriptions flowing from this research have been difficult to derive 2 there exists however a consistency to the research findings that does have an immediate application to school policy schools differ dramatically in quality

the contribution of human capital and its policies to per capita income in europe and the oecd abstract this paper studies empirically the effect of education policies on human capital and per capita income the results suggest for european and oecd countries that higher attendance at pre primary education greater autonomy of schools and universities a lower student to teacher ratio higher age of first tracking in secondary education and lower barriers to funding to students in tertiary education all tend to boost human capital through amplifying the positive effects of greater public spending on education benefits from pre primary education are particularly high for countries with an above average share of disadvantaged students school autonomy yields high benefits especially in countries where schools are subject to external accountability from a policy perspective improving the quality of the labour force and value for money of education policies are of utmost importance in the future especially in european countries facing population ageing and ever increasing fiscal constraints prompt policy action is needed given the very long delay with which the full effect of reforms in education policy materialises on human capital and per capita income

why the apple doesn t fall far understanding intergenerational transmission of human capital parents with higher education levels have children with higher education levels however is this because parental education actually changes the outcomes of children suggesting an important spillover of education policies or is it merely that more able individuals who have higher education also have more able children this paper proposes to answer this question with a unique dataset from norway using the reform of the education system that was implemented in different municipalities at different times in the 1960s as an instrument for parental education we find little evidence of a causal relationship between parents education and children s education despite significant ols relationships we find 2sls estimates that are consistently lower than the ols estimates with the only statistically significant effect being a positive relationship between mother s education and son s education these findings suggest that the high correlations between parents and children s education are due primarily to family characteristics and inherited ability and not education spillovers

educational policies in a long run perspective in this paper we study the effects of educational reforms on school attainment we construct a dataset of relevant reforms that occurred at the national level over the last century and match individual information from 24 european countries to the most likely set up faced when individual educational choices were undertaken our identification strategy relies on temporal and geographical variations in the institutional arrangements controlling for time country fixed effects as well as for country specific time trend by characterizing each group of reforms for their impact on mean years of education educational inequality and intergenerational persistence we show an ideal policy menu which has been available to policymakers we distinguish between groups of policies that are either inclusive or selective depending on their diminishing or augmenting impact on inequality and persistence finally we correlate these reform measures to political coalitions prevailing in parliament finding support for the idea that left wing parties support reforms that are inclusive while right wing parties prefer selective ones michela braga daniele checchi and elena meschi

examining the link between teacher wages and student outcomes the importance of alternative labor market opportunities and non pecuniary variation researchers using cross sectional data have failed to produce systematic evidence that teacher salaries affect student outcomes these studies generally do not account for non pecuniary job attribu

the desegregating effect of school tracking this paper makes the following point detracking schools that is preventing them from allocating students to classes according to their ability may lead to an increase in income residential segregation it does so in a simple model where households care about the school peer group of their children if ability and income are positively correlated tracking implies that some high income households face the choice of either living in the areas where most of the other high income households live and having their child assigned to the low track or instead living in lower income neighbourhoods where their child would be in the high track under mild conditions tracking leads to an equilibrium with partial income desegregation where perfect income segregation would be the only stable outcome without tracking

international competitiveness technical change and the state the machine tool industry in taiwan and japan abstract it is widely accepted that the growth performance of japan and the asian newly industrialized countries hong kong singapore south korea and taiwan is partly the result of the international competitiveness they have achieved in a number of export industries it remains however to explain how this competitiveness was achieved in the first part of the paper an attempt at such an explanation based on the theory of comparative advantage is critically examined it is argued that while this explanation does have some explanatory power it does not deal adequately with a the role of technical and productivity change b the causal mechanisms underlying economic growth and c the role of the state the rest of the paper examines the case of machine tools in taiwan and japan showing the importance of these three factors as well as a number of others as determinants of international competitiveness the paper ends with a discussion of policy dilemmas relating to international competitiveness in the taiwanese machine toot industry

does management matter in schools we collect data on management practices in over 1 800 high schools in eight countries we show that higher management quality is strongly associated with better educational outcomes the uk sweden canada and the us obtain the highest management scores followed by germany with a gap before italy brazil and india we also show that autonomous government schools government funded but with substantial independence like uk academies and us charters have higher management scores than regular government or private schools almost half of the difference between the management scores of autonomous and regular government schools is accounted for principal leadership and governance there are major disparities in the quality of education within and between countries oecd 2012 school managerial practices may be an important reason for such differences unfortunately understanding the role of management in schools within and across countries has been held back by a lack of robust and comparable instruments to systematically measure management practices and thus a lack of good data the key purpose of this article is to develop an international management index for schools and present descriptive evidence on management quality and education outcomes across schools of different types within and across countries we used double blind telephone interviews with school principals to collect information on management practices for over 1 800 schools across eight countries to construct our management index we average across 20 basic management practice measures in four areas of management operations monitoring target setting and people each question is evaluated against a scoring grid that ranges from one worst practice to five best practice our management index for each school represents the average of these scores we also constructed measures of school level pupil outcomes for these schools when data were available from examination results across regions and countries creating a matched management pupil outcome international data set at the school level these data allow us to document some stylised facts first we show that the adoption of basic managerial practices varies significantly across and within countries the uk sweden canada and the us obtain the highest average scores followed by germany italy and brazil while india has the lowest scores about half of the variance in school management is at the country level this share is larger in education than we have

collective efficiency growth path for small scale industry this study is concerned with the growth of small local industry in developing countries and explores one particular route for understanding and fostering such growth it focuses on the clustering of firms and the competitive advantage which they derive from local external economies and joint action captured in the concept of collective efficiency following a conceptual discussion the article explores the economic and institutional conditions which enhance or hinder collective efficiency this includes a case study which suggests that responding to opportunity and crisis requires shifting from mere reliance on external economies to joint action and from ascribed to earned trust

factor endowments inequality and paths of development among new world economies whereas traditional explanations of differences in long run paths of development across the americas generally point to the significance of differences in national heritage or religion we highlight the relevance of stark contrasts in the degree of inequality in wealth human capital and political power in accounting for how fundamental economic institutions evolved over time we argue moreover that the roots of these disparities in the extent of inequality lay in differences in the initial factor endowments dating back to the era of european colonization we document through comparative studies of suffrage public land and schooling policies systematic patterns by which societies in the americas that began with more extreme inequality or heterogeneity in the population were more likely to develop institutional structures that greatly advantaged members of elite classes and disadvantaging the bulk of the population by providing them with more political influence and access to economic opportunities the clear implication is that institutions should not be presumed to be exogenous economists need to learn more about where they come from to understand their relation to economic development our findings not only contribute to our knowledge of why extreme differences in the extent of inequality across new world economies have persisted for centuries but also to the study of processes of long run economic growth past and present

group decision making with uncertain outcomes unpacking child parent choice of the high school track predicting group decisions under uncertainty requires disentangling individual members utilities over the consequences of choice their expectations for uncertain outcomes and their choice process as a group i estimate simple bayesian models of child parent choice of high school track with subjective risk and unilateral or bilateral nonstrategic decisions by combining families actual choices with novel survey information about children s and parents subjective probabilities over choice consequences their individually preferred choices and their decision roles a set of policy counterfactuals confirms the importance of introducing the beliefs and decision roles of individual members in models and policy analysis of group decisions

does school quality matter returns to education and the characteristics of public schools in the united states this paper estimates the effects of school quality measured by the pupil teacher ratio average term length and relative teacher pay on the rate of return to education for men born between 1920 and 1949 using earnings data from the 1980 census we find that men who were educated in states with higher quality schools have a higher return to additional years of schooling rates of return are also higher for individuals from states with better educated teachers and with a higher fraction of female teachers holding constant school quality measures however we find no evidence that parental income or education affects average state level rates of return

performance pay and teachers effort productivity and grading ethics this paper presents evidence about the effect of individual monetary incentives on english and math teachers in israel teachers were rewarded with cash bonuses for improving their students performance in high school matriculation exams the main identification strategy is based on measurement error in the assignment to treatment variable that produced a randomized treatment sample the incentives led to significant improvements in test taking rates conditional pass rates and mean test scores improvements were mediated through changes in teaching methods enhanced after school teaching and increased responsiveness to students needs no evidence was found of manipulation of test scores by teachers

externalities in economies with imperfect information and incomplete markets this paper presents a simple general framework for analyzing externalities in economies with incomplete markets and imperfect infonnation by identifying the pecuniary effects of these externalities that net out the paper simplifies the problem of determining when tax interventions are pareto improving the approach indicates that such tax interventions almost always exist and that equilibria in situations of imperfect information are rarely constrained pareto optima it can also lead to simple tests based on readily observable indicators of the efficacy of particular tax policies in situations involving adverse selection signaling moral hazard incomplete contingent claims markets and queue rationing equilibria traditional discussions of externalities have emphasized the distinction between technological externalities in which the action of one individual or firm directly affects the utility or profit ofanother and pecuniary externalities in which one individual s or firm s actions affect another only through effects on prices while the presence of technological externalities imply in general that a competitive equilibrium may not be pareto efficient pecuniary externalities hy themselves are not a source of inefficiency the fact that prices change has of course important consequences there are both distributional and allocational effects but the distribution effects net out gains for example hy firms whose prices increase are precisely offset by losses e g to individuals who must pay higher prices and there are no welfare losses from the allocation effects as long as the price changes involved are small if firms are maximizing profits and individuals are maximizing utility both facing prices that correctly refiect opportunity costs then standard envelope theorem arguments imply that changes in profits or utility induced by changes in allocations resulting from any small change in prices are negligible

equity and efficiency in human capital investment the local connection a general model of community formation and human capital accumulation with social spillovers and decentralized school funding is used to analyse the causes of economic segregation and its consequences for equity and efficiency significant polarization arises from minor differences in endowments preferences or access to capital markets this makes income inequality more persistent across generations but the same need not be true for wealth equilibrium stratification tends to be excessive resulting in low aggregate surplus whether state equalization of school resources can remedy these problems hinges on how purchased social and family inputs interact in education and in mobility decisions

tracking can be more equitable than mixing parents and policy makers often wonder whether and how the choice of a tracked or mixed educational system affects the equality of opportunity i answer this question by analyzing the influence of peers on future educational results i define an equal opportunity policy as one that maximizes the average lifetime income of the worst off type of individuals in society i e students from disadvantaged backgrounds i find that tracking maximizes average lifetime income if the opportunity cost of college attendance is sufficiently high

if you pay peanuts do you get monkeys a cross country analysis of teacher pay and pupil performance why are teachers paid up to four times as much in some countries compared to others and does it matter specifically is the quality of teachers likely to be higher if they are paid higher up the income distribution in their own country and are pupil outcomes influenced by how well their teachers are paid this paper considers the determinants of teachers salaries across countries and examines the relationship between the real and relative level of teacher remuneration and the internationally comparable measured performance of secondary school pupils we use aggregate panel data on 39 countries published by the oecd to model this association our results suggest that recruiting higher ability individuals into teaching and permitting scope for quicker salary advancement will have a positive effect on pupil outcomes

the long run effects of reducing early school tracking abstract this paper studies the effects of a french detracking reform on individuals long run education and labor market outcomes the reform delayed the age at which students were separated into vocational and general education by two years from age 11 to 13 the assignment of students to different types of education at age 11 was instead replaced by ability grouping whereby students followed a common general education curriculum but were divided into different classrooms based on their academic achievement using a regression discontinuity design i find that the reform raised individuals level of education and increased their wages by 6 at ages 40 to 45 these effects are concentrated among men and individuals from low socioeconomic backgrounds however the reform solely benefited individuals whose parents were born in france as it did not significantly affect children of immigrants educational and labor market outcomes

how significant are externalities for development if one man starts a new idea it is taken up by others and combined with suggestions of their own and thus it becomes the source of further new ideas and presently subsidiary trades grow up in the neighbourhood supplying it with implements and materials marshall 1920 p 225

educational reform ability and family background in this paper we evaluate the impact of a major school reform that took place in the 1950s in sweden on educational attainment and earnings the reform which has many common elements with reforms in other european countries including the uk consisted of increasing compulsor schooling imposing a national curriculum and abolishing selection by ability into academic and non academic streams at the age of 12 comprehensive school reform our data combines survey data with administrative sources we find that the reform increased both the educational attainment and the earnings of children whose fathers had just compulsory education however the earnings of those with educated parents declined possibly because of a dilution of quality at the top end of the education levels the overall effect of the reform was however positive

mismatch in human capital accumulation this article studies the allocation of heterogeneous agents to levels of educational attainment the goal is to understand the magnitudes and sources of mismatch in this assignment both in theory and in the data the article presents evidence of substantial mismatch between ability and educational attainment across 21 oecd countries with a main focus on germany italy japan and the united states model parameters are estimated using a simulated method of moments approach the main empirical finding is that measured mismatch arises largely from noise in test scores and does not reflect borrowing constraints taste shocks play a minor role in explaining mismatch

inflation and labour market adjustment the uk experience in this paper the author considers a proposed method for testing for the presence of keynesian rigidities in the wage adjustment process but illustrates that if any other factors exist that may cause noninstantaneous wage adjustment then this method cannot be applied further he presents evidence that for the united kingdom at least a wage setting process that allows for these factors will provide a reasonable explanation of the influence of inflation on labor market adjustment over the period 1963 79 copyright 1988 by the london school of economics and political science

does raising the principal s wage improve the school s outcomes quasi experimental evidence from an unusual policy experiment in israel this paper reports estimates of the causal effects of a 50 percent increase in the salary of headmasters of high schools in israel the results suggest that the program led to significant improvements in twelfth grade students academic achievements however the effect was relatively modest comprising increases of about 5 10 percent in the school mean matriculation rate average score and number of subjects and credit units taken in matriculation programs based on these results and the lack of evidence regarding the effect of increasing teachers salary it seems that priority should be given to paying higher wages to school principals

firm level knowledge accumulation and regional dynamics two bodies of literature have contributed significantly to our insight into the forces driving competitiveness and economic growth regional agglomeration studies emphasise the favourable impact of geographical proximity on regional economic performance particularly through knowledge spillovers however the firms that constitute those agglomerations largely remain black boxes in contrast studies dealing with technological learning explain economic performance at firm level without systematically taking account of the effects of geographical proximity the aim of the paper is to propose a possible way to bridge this gap this contributes to our understanding of the determinants of economic growth in industrial clusters an empirical illustration of a capital goods cluster is elaborated

inflation stabilization and the vanishing size wage effect the author examines wage patterns under an incomes policy in mexico in 1987 94 the policy specified increases in the minimum wage rate but also guided salary negotiations more generally the author finds indications of a substantial but largely temporary effect on wage rates and evidence consistent with more intensive monitoring of compliance in large firms than in smaller ones for example three years after policy implementation public sector wages had fallen approximately 10 relative to private sector wages and wages in the largest private firms had fallen 15 relative to those in the smallest private firms these relative wage effects are consistent with the centralized administration of the policy

economic reform in developing countries some conceptual issues abstract this paper is an effort to show that the outcome of stabilization and structural adjustment policies largely based on the neoclassical economic rationale was justifiable neither in terms of the analytical nor the historical literature the very ideological nature and the inherent contradictions of policies inhibited successful implementation and accentuated poverty and inequity in developing countries by drawing on the views of various contemporary schools of economic thought the paper also questions the validity of the international financial institutions claims of consensus on development policy the paper emphasizes that in social science research and more so in policy prescriptions the search for consensus may in fact be futile