the uk demand for cigarettes 1954 1986 a double hurdle approach the double hurdle perspective suggests that it is crucial to distinguish between per capita and per smoker consumption when estimating the demand for cigarettes this paper presents a two equation model which identifies consumption and participation as two separate decisions the model is estimated with annual data on u k cigarette expenditure and participation rates highlighting the differing influence of prices income and health scares on the participation rate and on smokers demand for cigarettes

a critical evaluation of rate of return analysis since the development of the concept of human capital schultz i 96 i becker i964 analysis of rates of return has been a standard means of assessing education the conventional way of measuring the return to education is to take a snap shot view of the earnings of people with differing educational experiences it is then possible to calculate the average income earned at different stages of a working life the rate of return to education can then be calculated as the internal discount rate which equates the discounted increment to average earnings to the costs involved in obtaining education both private and social rates of return can be calculated provision of education is often subsidised so that the private cost is lower than the social cost and this will tend to raise the private return above the social return taxation of the private benefit of education offsets this at least partly however ziderman i 973 records that in developed countries private returns normally exceed social returns this pattern is confirmed by psacharopoulos i985 in many cases it is not possible to calculate a full rate of return but one can look at the incremental effect of schooling on earning power thus denison i 967 suggests that in the united states each year of education raises earning power by an average of around 5 6 with the effect tending to rise with the duration of education card and kruger i992 identify effects of similar magnitude it need not be the case that education goes on raising earning power overeducation is clearly possible rudd i990 suggests that in the social sciences education beyond degree level is very damaging to earnings prospects tarsh i992 questions aspects of rudd s study but agrees that higher education graduates do suffer some pay disadvantage rate of return calculations can form the basis for policy decisions in principle social returns to investment in human capital could be compared with those on physical capital so as to give a basis for the allocation of resources between the two types of investment estimates of social rates of return to different types of education could also be used to guide expenditure decisions between these different types however there are many possibly offsetting biases entering into the calculations of rates of return and it is perhaps concern with these that has

the quality of schooling quantity alone is misleading although much research discusses the quantity of schooling as an effective impact on productivity and earnings most such research leaves out the idea of the quality of schooling which may cause biases in the estimated returns to schooling this paper consequently attempts to extend the standard mincerian approach to incorporate school quality as well as quantity it demonstrates how exclusion of quality in the standard procedure may cause biases in the estimated returns to years of schooling probably in the upward direction the paper explores the implications of this extension of the standard model for the case of young brazilian males it shows that the estimate of the private return to years of schooling using the preferred quality inclusive specification is only one half the estimate using the standard procedure indicating substantial upward bias in the standard estimates it further outlines a method for estimating a social return to quality and finds that it exceeds substantially the social return to quantity the paper then shows why this in turn suggests there may be an equity productivity trade off in schooling investments

global educational expansion and socio economic development an assessment of findings from the social sciences summary among development agencies conventional wisdom holds that educational expansion improves economic welfare and health reduces inequalities and encourages democratic political systems we investigate the empirical foundations for these expectations in recent social science research consistent evidence indicates that health and demographic benefits result from educational expansion and suggests that education enhances but does not ensure individuals economic security however the impact of educational expansion on growth remains debated and decades of sociological studies offer evidence that educational expansion does not necessarily narrow social inequalities finally considerable controversy surrounds the implications of educational expansion for democratization reasonable forecasts of the consequences of further educational expansions need to consider the diverse social contexts in which these expansions will occur

earnings schooling and economic reform earnings schooling and economic reform econometric evidence from hungary 1986 2004 nauro campos and dean jolliffe how does the relationship between earnings and schooling change with the introduction of comprehensive economic reform this article sheds light on this question using a unique data set and procedure to reduce sample selection bias the principal assumptions are that sample selection bias was minimal in 1986 and that the decision to participate in the wage market after 1986 is correlated with age gender and schooling demographics once corrected for sample selection on observables the increase in returns is smaller suggesting the existence of the positive correlation between education and the decision to participate in the wage sector that was discussed above 16 comparing the panels shows that sample selection bias is positive and quite large throughout the period of analysis an advantage of the wage and earnings survey design is that the sample was selected in a single stage and t

improving quality versus increasing the quantity of schooling estimates of rates of return from rural pakistan abstract this paper s approach permits a more satisfactory assessment than previously of the rates of return to improving school quality versus increasing quantity in terms of labor earnings and their implications for educational policy in developing countries special data from rural pakistan collected for this study are used to make estimates within a conceptual framework that controls for important individual and household choices the results indicate that rates of return were much higher for investing in primary school quality or quantity than for investing in middle schools and at the primary school level somewhat higher for expanding low quality schools than for increasing quality in existing schools

effects of family background on earnings and returns to schooling evidence from brazil we investigate whether omitted family background variables are responsible for high returns to schooling estimated in brazil returns to schooling fall by about one third when parental schooling is added to wage equations surprisingly the schooling of fathers in law has larger effects on wages than the schooling of fathers on the basis of a model of assortative mating we interpret this as evidence that parental characteristics represent unobservable worker attributes rather than nepotism in the labor market we conclude that the family background bias in returns to schooling is modest and need not imply returns to family connections

the quality of schooling comment a recent article in this review by jere behrman and nancy birdsall 1983 raises an important issue for makers of educational policy in developing countries behrmanbirdsall break ground both in specifying a model that treats schooling quantity and quality simultaneously and systematically and in developing practical methods for evaluating social rates of return to schooling quantity and quality in the absence of externalities their model is estimated using data from brazil a country with an impressive recent record in expanding primary schooling this comment has two objectives the first is to point out methodological errors made by behrman and birdsall in the derivation of the social rate of return to schooling quantity the second is to test the robustness of this corrected finding with a data set that differs from that used by behrman and birdsall the principal finding of the behrmanbirdsall analysis is that the estimated social rate of return to schooling quantity in brazil is much lower than that to schooling quality 6 8 vs 10 4 percent if this is generally the case in developing countries the possibility of a conflict between productivity and equity goals becomes an issue to be taken into account by educational policymakers for example with the conclusions reached by behrman birdsall if only one third of the students were to attend school and the resources saved by schooling only one third of the students could be used to increase both quality and quantity by 50 percent the estimates imply an overall income gain of 32 percent p 941 the analysis that follows demonstrates that correct procedure yields an estimated social rate of return to schooling quantity which is only slightly lower than that to schooling quality 9 8 vs 10 4 percent indicating no substantial inefficiency in the allocation of educational resources between schooling quantity and quality to test the robustness of this result a model of the behrmanbirdsall type is estimated using a 1979 set of micro data from one city in the brazilian northeast using theoretically and empirically preferred variable definitions very similar estimation results are obtained with respect to relative social rates of return to quantity and quality section i contains a correction of the errors made in deriving the social rate of return to schooling quantity section ii is empirical and contains a summary of potential sources of bias a description of the data set used to estimate a behrman birdsall type model and estimation results section iii contains a discussion of some remaining problems

skills schooling and household income in ghana this article examines the impact of cognitive skills on the income of households in ghana it uses scores on mathematics and english tests to measure cognitive skills and estimates the returns to these skills based on farm profit off farm income and total income the article uses powell s censored least absolute deviations and symmetrically trimmed least squares estimators to estimate farm and off farm income in contrast to heckman s two step or the tobit estimator powell s estimators are consistent in the presence of heteroscedasticity and are robust to other violations of normality the results show that cognitive skills have a positive effect on total and off farm income but do not have a statistically significant effect on farm income

nutrients impacts and determinants understanding the determinants of nutrient intake and the influence of nutrition on performance is critical in designing policies to alleviate hunger and malnutrition a series of studies undertaken by the authors which are synthesized here analyzes the influence of prices income and women s schooling on the nutrient intake of those in developing countries and the effect of nutrition on health productivity wages and fertility these studies suggest that the impact of food price increases may be strong particularly among those with the lowest incomes that the growth of income may be less likely to improve nutrient intake than has been suggested by others and that womzen s schooling is important in improving nutrition these studies also indicate that nutrition exerts a positive influence on wages productivity and fertility our limited knowledge of the role and determinants of nutrition is reflected in the finding of unduly strong effects of seasonalitv on price nutrition relations and the lack of a direct association between nutrition and health the nutrition of poor populations is of substantial interest because of the widespread and plausible presumption that better nutrition improves the welfare of individuals in such populations nutrition also is of interest because of the common conjecture that better nutrition improves productivity a series of our studies have analyzed the relations between nutrition and health labor productivity and fertility and the relations between prices income women s schooling and nutrition intake here we synthesize the results of these studies and address some of the puzzles and policy implications that have arisen

a population macroeconomic growth model for currently developing countries abstract this paper constructs a theoretical model that predicts as observed in some currently developing countries that the average school enrollment ratio may fall even when the average fertility rate declines unlike existing models the current analysis indicates that economic growth may slow down when a fertility transition starts asymmetric behavior with respect to fertility and education between households stemming from income inequality plays an important role in generating this result we examine the implications of an education subsidy policy contrary to intuition in some circumstances this policy may decrease the average school enrollment ratio and future economic growth

caveat emptor cross country data on education and the labor force abstract cross country data on education and the labor force frequently are used to describe important dimensions of development and to estimate models of economic growth and growth determinants the impact of education and related phenomena this investigation finds 1 there are serious intertemporal and inter country comparability problems with these data that may importantly affect inferences about labor force size trends and productivity and schooling investments and impact 2 data gaps are systematically related to levels of development and literacy and 3 conclusions about the determinants or consequences of development based on constructed data that have been made available to fill data gaps can be seriously misleading

primary schooling cognitive skills and wages in south africa using a fairly rich data set from south africa the paper finds that despite the sobriquet gutter education the african schooling systems help to create cognitive skills and these skills are a determinant of wage levels various robust estimators are used but the influential outlier problem does not turn out to be serious computational skills appear to be more important than comprehension skills in influencing wages the african primary schooling system was an extremely poor generator of computational skill the seven year course raising the computational test score by 13 if that a policy implication is that productivity could be raised by certain near costless reallocations of resources in favour of mathematical learning

school expenditures and post schooling earnings evidence from high school and beyond studies based on inputs measured at the state level generally report that school expenditures have substantial effects on students adult wages whereas studies based on less aggregated measures report small effects the author uses wage data from high school and beyond to analyze this discrepancy and to estimate the effect of school expenditures on students post schooling earnings the author finds that the discrepancy in the literature stems mostly from two factors measurement error in district level expenditures and omitted state effects in the earnings regression the author also finds that the effect of school expenditures on earnings is significant but small a 10 increase in school spending would increase students adult wages by only 0 68 copyright 1996 by mit press

profit maximisation vs agency an analysis of charitable giving by uk firms the charitable giving of a large sample of publicly quoted uk firms is analysed within a model that explores the profit maximisation and managerial utility enhancement motives for giving the empirical method draws a distinction between the decision to participate in giving and the determination of the amount of corporate contributions firm size and advertising intensity are found to be positively associated with the probability of participation in giving stricter corporate governance and the rate of directors remuneration are negatively related to the probability of participation among givers the rate of giving is related positively to r d intensity the rate of directors remuneration and corporate profitability and negatively to firm indebtedness

the impact of primary schooling on economic development a review of the evidence abstract the contribution of primary schooling to economic development is greater than has conventionally been percieved this review of recent research shows that primary schooling increases labour productivity in both urban and rural sectors and that the economic returns to such investment are typically high in addition it reduces fertility improves health and nutrition and promotes other behavioural and attitudinal changes which are helpful to economic development investment strategies which give primary schooling an important place would be more conducive of growth with equity than many alternatives priorities for government and donor policies are indicated as are those for future research

earnings and ethnicity in trinidad and tobago this study employs 1993 continuous sample survey of the population cssp data for trinidad and tobago to investigate the determinants of earnings by ethnicity the data organised into three ethnic groupings reveal lower levels of remuneration in the labour market for africans and indians than for individuals of other ethnicities taken as a whole while the larger portion of the earnings differentials generally appears to be explained by ethnic differences in characteristics valued by the labour market africans and indians would benefit substantially if they were to receive the same rates of remuneration for their educational endowments as workers of other ethnicities in the trinidad and tobago labour market notwithstanding indians lowest average earnings africans appear more likely to be discriminated against

a more general approach to fertility determination in a developing country the importance of biological supply considerations endogenous tastes and unperceived jointness the chicago columbia economic model of fertility emphasizes that both the number quantity and the unobservable quality of children are arguments in the parental preference function focus is generally on demand determinants with fixed tastes biological supply considerations gernerally are deemphasized the major alternative to the chicago columbia model is the pennsylvaina model which emphasizes that parental utility is conditional on norms regarding family size and own consumption empirical tests which shed some light on the relevance of the chicago columbia versus the pennsylvania models for understanding fertility determination in a developing country were conducted on a sample of nicaraguan women aged 15 45 using a more general fertility model epw which encompasses features of both models the estimation of a linear approximation to the fertility determination relation resulting from a generalized model includes 3 sets of variables 1 those included in standard chicago columbia empirical estimates 2 some related to the pennsylvaina models emphasis on natural fertility supply factors and 3 some related to the latter models emphasis on endogenous norms tastes the pennsylvania model with its emphasis on supply tastes and unperceived jointness adds to the understanding of the empirical completed fertility experience in the nicaraguan sample beyond that of the standard chicago columbia model the implications of this basic result are numerous and may be quite important in understanding fertility behavior in developing economies and in devising appropriate related policies 4 examples are given 1 fertility behavior may be more complicated than assumed in conventional chicago columbia analyses 2 results suggest that it may be important to analyze fertility and to formulate policy within a larger framework which integrates fertility and health and nutrition concerns 3 if tastes are important and endogenous as the results suggest they are interpretations of the impact of fertility changes on private welfare are much more ambiguous than often is realised 4 some conventional interpretations of the variables in the standard model may be misleading in understanding and in policy formulation standard chicago columbia variables are womens schooling and household income the full epw pennsylvania model correlates the supply variables parasites therapeutically treatable medically preventable womens age age of 1st cohabitation months breastfed nutrition the taste variables religious or civil marriage religious services month residence birth rate siblings parents present migration currently or in childhood and compares them to the chicago columbia variables outcome on the nicaraguan sample

note a note on the use of the capm as a strategic planning tool a recent paper by naylor and tapon naylor thomas h francis tapon 1982 the capital asset pricing model an evaluation of its potential as a strategic planning tool management sci 28 1166 1173 showed that the capital asset pricing model capm can be an important strategic planning tool but their specific strategic suggestions were incorrect the proper conclusion to draw from the capm is that a company should purchase a business if its expected return exceeds the expected return in equilibrium of a business in the same risk class in the absence of synergy each potential acquisition should be evaluated on its own merit independent of the other businesses in a company s portfolio when all firms are in equilibrium no gain may be made from merger or takeover

an investigation of the increasing prevalence of nonpurchase of meat by british households the purpose of the analysis has been to investigate the determinants of the household s decisions regarding the purchase of meat in great britain the approach using a box cox generalization of the double hurdle model has depicted the household making two choices namely whether or not to purchase the product the participation decision and then for those households which do purchase how much to buy the expenditure decision the determinants considered are socioeconomic variables such as the total expenditure of the household market prices characteristics of the householder age gender education type of employment and characteristics of the household location presence of children etc by conducting the analysis over several years of survey data 1975 1993 it is possible to investigate whether the influence of these variables has changed over time the bulk of the empirical analysis has concerned single adult households with or without children

cross section estimation of us demand for alcoholic beverage a flexible limited dependent variable model is used to examine us demand for alcoholic beverage parameterization and distributional assumptions of the double hurdle model cragg 1971 and tobit model tobin 1958 are rejected findings suggest that price income household composition and other characteristics have significant effects on alcohol consumption income and own price elasticities are significant but relatively small

the capital asset pricing model an evaluation of its potential as a strategic planning tool in this paper we provide a summary of the capital asset pricing model capm and point out how it might possibly be used as a tool for strategic planning by corporations that own a portfolio of businesses we also point out some of the assumptions underlying the capm which must be satisfied if it is to be used for strategic planning next we include a critical appraisal of the capm as a strategic planning tool finally we state the case for linking competitive strategy models capm models and business simulation models

the structure of worker compensation in brazil with a comparison to france and the united states abstract we employ comprehensive linked employer employee data for brazil to analyze wage determinants and compare results to abowd et al 2001 for french and u s manufacturing while returns to human capital in brazilian manufacturing exceed those of the other countries occupation and gender differentials are similar the worker characteristics component accounts for much of the greater wage inequality in brazil but the establishment fixed component has scant explanatory power thus firm or industry level factors offer little scope for explaining the differences in wage inequality brazil s wage structure resembles that of france a country with some similarity in labor market institutions

public inputs and child schooling in brazil household data from a one percent sample of the 1970 brazilian census are used to analyze the effect of public inputs i e the supply of schooling on children s school attainment in brazil the household data are combined with measures of school availability and quality derived directly from the same census data the measures are based on the number and education of schoolteachers in each of 169 different areas of the country elasticities of demand with respect to these public inputs are estimated these elasticities are high in both rural and urban areas in urban areas the positive effect of public inputs is greater for children from households with poorer and less educated parents in rural areas the positive effect of public inputs is greater if anything for children from households that are relatively better off at least compared to other rural households

note the capital asset pricing model and strategic planning we make two clarifying comments on a recent paper by naylor and tapon naylor t h f tapon 1982 the capital asset pricing model an evaluation of its potential as a strategic planning tool management sci 28 1166 1173 the conclusions of their paper are significantly affected by this

investments in schooling in two generations in pre revolutionary nicaragua the roles of family background and school supply abstract family background and school supply underlie the demand and supply for schooling but are usually ignored in empirical estimates these considerations are investigated for two generations in nicaragua using unique data on adult sisters and their offspring to identify inter versus intrafamilial effects and to control for unobserved family background the results suggest that the standard interpretations are misleading 1 unobserved family background and school supply factors are important in schooling determination 2 omission of these factors leads to overestimates of impacts of parental schooling and family size 3 both parental schooling and family size primarily represent unobserved family background and school supply in standard estimates

returns to endogenous education the case of honduras the rapid expansion of the education sector in developing countries and the scarcity of public funds have increased the need for an accurate evaluation of educational policies estimates of rates of return to education have often been used as an integral part of cost benefit studies and programme evaluation efforts this study uses household survey data from honduras for 1990 to estimate returns to education that allow for worker heterogeneity and individual self selection in the education process a sequential estimation procedure is used that enables study of the interaction between educational attainment and earnings determination it is found that accounting for endogenous educational attainment leads to substantially higher estimated returns to education compared to traditional least squares estimates the possible magnitude of the bias underscores the importance of recognizing the role of self selection and comparative advantage in the education process

working wives and food away from home the box cox double hurdle model household expenditures on food away from home are analyzed with the use of the bls 1989 consumer expenditure survey parameterization and distributional assumptions of cragg s double hurdle model are generalized for this purpose and the resulting model outperforms the more traditional ones results suggest households with working wives and those with higher income are more likely to consume food away from home and also to consume more than others wife s age and household size increase the conditional level of consumption education has conflicting effects on probability and conditional level of consumption

human capital pricing equations with an application to estimating the effect of schooling quality on earnings this paper formulates and estimates alternative models for the pricing of labor services we present economic models that rationalize empirical specifications in the literature and we offer evidence on the validity of those specifications widely used efficiency units models of labor services are inconsistent with evidence from the u s labor market a model of heterogeneous skills provides a more accurate description of earnings data we present evidence that the pursuit of comparative advantage and selective migration are important features of the u s labor market when these features are included in the model the only support for an effect of schooling quality on earnings is through the return to college education three interactions are empirically important in explaining log wage equations a between schooling quality and education b between regional labor market shocks and education and c between region of residence and regionof birth because of this third interaction which can arise from comparative advantage in the labor market no unique quality effect on returns to education can be defined independently of the market in which it is used

wage and labor supply effects of illness in cote d ivoire and ghana instrumental variable estimates for days disabled abstract sickness should make individuals less productive but there are problems in measuring this effect first how is adult morbidity measured in a household survey second how is the impact or morbidity on productivity inferred if earning is partly used to improve health self reported functional activity limitation due to illness is considered an indicator of morbidity for wage earners and self employed people to deal with both the measurement and joint determination problems an instrumental variable estimation approach is used where local food prices and health services instrument for disability days that reduce wages by at least 10 and hours by 3 or more

a human capital model of the effects of ability and family background on optimal schooling levels this paper develops a theoretical model of optimal schooling levels where ability and family background are the central explanatory variables we derive schooling demand and supply functions based on individual wealth maximization using nlsy79 data we stratify our sample into one year fte work experience cohorts for 1985 1989 mincer s 1974 overtaking cohort the years of work experience at which individuals observed earnings approximately equal what they would have been based on schooling and ability alone corresponds to 13 fte years of work experience yielding on average a rate of return of 9 6 percent and an average optimal 11 4 years of schooling

quadratic engel curves and consumer demand this paper presents a model of consumer demand that is consistent with the observed expenditure patterns of individual consumers in a long time series of expenditure surveys and is also able to provide a detailed welfare analysis of shifts in relative prices a nonparametric analysis of consumer expenditure patterns suggests that engel curves require quadratic terms in the logarithm of expenditure while popular models of demand such as the translog or the almost ideal demand systems do allow flexible price responses within a theoretically coherent structure they have expenditure share engel curves that are linear in the logarithm of total expenditure we derive the complete class of integrable quadratic logarithmic expenditure share systems a specification from this class is estimated on a large pooled data set of u k households models that fail to account for engel curvature are found ro generate important distortions in the patterns of welfare losses associated with a tax increase

labour market impacts of school expenditure and class size evidence from china this study is a first attempt to estimate the impact of school resources on students subsequent labour market earnings in china combining unprecedented school data from the early 1950s to the 199

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

earnings schooling and economic reform econometric evidence from hungary 1986 2004 how does the relationship between earnings and schooling change with the introduction of comprehensive economic reform this article sheds light on this question using a unique data set and procedure to reduce sample selection bias the evidence is from consistently coded nonretrospective data for about 4 million hungarian wage earners returns to skill increased 75 percent from 1986 to 2004 that is during the period stretching from communism to full membership in the european union the winners were those with a college or university education and those employed in the services sector which here excludes those in public services the reform losers were those in construction and agriculture those with only a primary or vocational education who experienced a decline in returns to their education and younger workers who acquired most of their education after the main reforms were in place

rethinking the product portfolio a generalized investment model a generalized financial product portfolio theory is developed based on the underlying economic factors determining product profitability and risk for applications involving the firm s product investment decisions the model developed provides a means for differentiating market related risk and return from firm specific risk and return for each product two hypothetical illustrations of the model are described and the managerial implications are discussed

does more schooling make women better nourished and healthier adult sibling random and fixed effects estimates for nicaragua there is debate on whether schooling causes increases in productivity or whether the estimated relationships reflect ability knowledge tastes etc that are associated with schooling this paper examines the impact of women s schooling on women s health and nutrition with and without controls for unobserved childhood background factors related to ability and motivation random and fixed effects models are estimated using data on adult sisters both sets of estimates reinforce the relationships found in standard estimates that women s schooling positively affects their health and nutrient intakes the latter result is particularly robust

the impact of the bolsa escola familia conditional cash transfer program on enrollment dropout rates and grade promotion in brazil this paper examines the impact of brazil s bolsa escola later renamed bolsa familia program on children s progress in school in brazil the bolsa program which started in the 1990s and expanded rapidly in 2001 and 2002 provides monthly cash payments to poor households if their children between the ages of 6 and 15 are enrolled in school using eight years of school census data from 1998 to 2005 our estimation method compares changes in enrollment and in dropout and grade advancement rates across schools that adopted the bolsa program at different times we estimate that after accounting for cumulative effects the bolsa program has increased enrollment in brazil by about 5 5 percent in grades 1 4 and by about 6 5 percent in grades 5 8 we also estimate that the program has lowered dropout rates by about 0 5 percentage points and raised grade promotion rates by about 0 9 percentage points for children in grades 1 4 and has reduced dropout rates by about 0 4 percentage points and increased grade promotion rates by about 0 3 percentage points for children in grades 5 8 only about one third of brazil s children participate in the bolsa program so the assumption that these results are due only to the impact of the program on participants with no spillover effects onto non participants implies that the impact of participating in the bolsa program is about three times higher than these estimates while these impacts cast a favorable light on the program simple calculations based on the enrollment impacts suggest that the likely benefits in terms of increased wages may not exceed the costs of the program

microeconomic approaches to development schooling learning and growth within the field of economic development over the past 15 years or so particularly significant advances have been made in what can be loosely called micro development an area defined principally by the units that are examined not by a particular methodological approach the units may be indi viduals households networks banks government agencies and so on as opposed to countries within this area economists use a wide variety of empirical methods informed to different degrees by economic models they use data from developed and

are educated workers really more productive abstract this paper presents a new method for examining the productive nature of education it outlines an econometric model which simultaneously estimates an earnings function and a production function for workers and the firms where they are employed this approach permits a direct comparison to be made between the relative wage and relative productivity of workers with different levels of education using a unique data set from ghana two primary questions are addressed 1 are educated workers more productive than workers with no formal education and 2 do earnings differentials between workers with different levels of education reflect genuine productivity differentials the results suggest that education is positively correlated with productivity in ghanaian manufacturing and that firms pay workers according to their productivity

where has all the education gone cross national data show no association between increases in human capital attributable to the rising educational attainment of the labor force and the rate of growth of output per worker this implies that the association of educational capital growth with conventional measures of total factor production is large strongly statistically significant and negative these are on average results derived from imposing a constant coefficient however the development impact of education varied widely across countries and has fallen short of expectations for three possible reasons first the institutional governance environment could have been sufficiently perverse that the accumulation of educational capital lowered economic growth second marginal returns to education could have fallen rapidly as the supply of educated labor expanded while demand remained stagnant third educational quality could have been so low that years of schooling created no human capital the extent and mix of these three phenomena vary from country to country in explaining the actual economic impact of education or the lack thereof

family ties and labor markets in the united states and brazil we use comparable surveys from brazil and the united states to examine vertical and horizontal connections between families motivated by a model of assortative mating and intergenerational transmission of schooling and earnings we include the schooling of relatives in male wage equations we find that the effect offather in law s schooling is larger than the effect offather s schooling in brazil while the opposite is observed in the united states we interpret these effects as indicators of unobservable worker characteristics with differences in assortative mating and female labor market activity explaining the differences in the apparent effect of fathers and fathers in law in the two countries

decomposing the gender gap in cognitive skills in a poor rural economy girls lag markedly behind boys in education in many developing countries which may slow economic growth and increase inequity this paper uses indicators of the output of the education production process cognitive skills to characterize and to investigate the determinants of the large educational gender gap in rural pakistan local school availability accounts for about a third of the total cognitive achievement gender gap and over two fifths of that in numeracy which implies that policies that increased local school availability for girls could reduce substantially the gender gaps in cognitive skills to further reduce these gender gaps will require policies that focus on the demand side of the market where our results suggest the response to modest changes in incentives may be high

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

off farm labour allocation decisions in small scale rural households in zimbabwe the double hurdle model is used to analyse the off farm labour decisions of small scale agricultural household members in the shamva district of zimbabwe the approach permits the joint modelling of the decision to participate in the labour market and the decision regarding the amount of time allocated to work results indicate that a number of variables notably gender education and assets indeed have effects which are qualitatively and quantitatively different in terms of participation and hours worked overall the empirical analysis confirms the importance of individual characteristics such as gender and education and household farm characteristics e g land area accessible to the household productive assets remittances and the agricultural terms of trade in influencing the labour market decisions of rural household members

school quality and returns to education of u s immigrants using the u s labor market as a common point of reference this article investigates the influence of source country school quality on the returns to education of immigrants based on 1980 and 1990 census data we first estimate country of origin specific returns to education results reveal that immigrants from japan and northern europe receive high returns and immigrants from central america receive low returns next we examine the relationship between school quality measures and these returns holding per capita gdp and other factors constant immigrants from countries with lower pupil teacher ratios and greater expenditures per pupil earn higher returns to education

labor force participation and earnings determinants for women in the special conditions of developing countries abstract little systematic analysis exists regarding hypothesized special labor market conditions for women in developing countries this study explores such conditions in nicaragua major results are i small children affect participation less than in developed countries due to child care from extended families or while on informal sector jobs and the necessity for poor mothers to work ii schooling and experience have major roles affecting work sector and earnings but the primary school return is half that cited by the world bank iii other human capital variables particularly nutrition have some impact

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

long run impacts of intergovernmental transfers this paper provides regression discontinuity evidence on the long run impacts of a temporary increase in federal transfers to local governments in brazil revenues and expenditures of the communities benefiting from extra transfers increased by about 20 percent during the 4 year period from 1982 to the end of 1985 previously established schooling and literacy gains of school age cohorts as well as reduced poverty in the community overall as of 1991 are generally attenuated but persist in 2000 by 2010 the estimated education and income gains are still positive but typically cannot be distinguished from zero children and adolescents of the next generation born after the extra funding had disappeared show gains of about 0 06 to 0 10 standard deviation across the entire score distribution of two nationwide exams at the end of the 2000s available evidence on mechanisms points to a persistent reduction of the student teacher ratio in local public primary schools throughout the 1990s and 2000s we also find discontinuities in education levels and incomes of test takers parents that are consistent with intergenerational human capital spillovers

the relevance of standard estimates of rates of return to schooling for education policy a critical assessment abstract this paper examines the accuracy and usefulness of estimated rates of return to schooling based on the standard human capital model of becker and mincer regarding accuracy it investigates whether failure to account for differences in ability and school quality lead to significant biases estimates using ghanaian data confirm this possibility even when accurate estimated rates of return to additional years of schooling may have limited policy implications more useful for governments are rates of return to investments in school quality the paper uses data on cognitive skills to estimate rates of return to three types of school quality improvements

the logic of testing structural change in meat demand a methodological analysis and appraisal in the past two decades the profession has expended valuable resources testing structural change in meat demand with mixed results overlooked to date is a fundamental methodological problem that transcends all methods of testing for structural change in this study a methodological framework is used to show that there is no valid test of structural change because of this result additional criteria from the methodology literature are used to evaluate the literature on structural change in meat demand and to provide suggestions for fertile areas of future research

educational attainment and earnings determination in colombia the expansion of the education sector in developing countries since the mid 1950s is certainly impressive between 1950 and 1980 primary and secondary enrollment ratios in many of these countries tripled or quadrupled and the educational gap with respect to developed countries narrowed although most social planners and politicians would argue that there is still a long way to go before socially optimal levels of education are attained it is also commonly acknowledged that there is an increasing need for a more careful and systematic evaluation of educational policies and by implication public funding priorities 2 although there is the question of whether all types of education should be considered equally much of the work in the evaluation process has been devoted to the production of estimates of the social and private rates of return to schooling 3 most of the early research in this area ignored the effects of educational quality heterogeneous individual abilities and other types of selection bias issues these so called first generation models produced relatively high rates of return to additional years of education from 15 to 30 depending on the country and statistical methodology employed 4 these estimates led to a form of consensus that education was a high priority item in government budget planning there is only limited evidence of how rates of return have fared subsequent to the growth of the education sector in the case of colombia however g psacharopoulos noted that the rate of return to education fell from about 20 in the early sixties to below 10 by 1979 5 during the eighties a number of second generation studies

investment in education do economic volatility and credit constraints matter abstract recent research has focused on the effects of economic volatility on the investment in physical capital this paper shows that economic volatility and the lack of financial markets have a negative effect also on the accumulation of human capital our evidence drawn from cross country and panel regressions is that average secondary enrollment in the period 1970 1972 is negatively affected by the lack of financial markets income or employment volatility and income inequality our results are robust to different specifications of volatility the inclusion of public expenditure in education country specific effects and different sets of regressors

does the labour market explain lower female schooling in india labour market discrimination against women and parental discrimination against daughters are two of the most commonly cited explanations of the gender gap in education in developing countries this study empirically tests the labour market explanation for india using recent household survey data the results reveal substantial omitted family background bias in the estimates of rates of return to education the findings suggest that as well as overall labour market discrimination girls face poorer economic incentives to invest in schooling than boys because they reap lower labour market returns to education than boys

the southern wage gap human capital and the quality of education this suggests that school quality can play an important role in explaining the racial wage gap welch 28 and smith 19 both provide anecdotal evidence that relates the narrowing of school quality to the falling racial gap in earnings the rising rate of return for black workers on years of school documented by weiss and williamson 27 welch 28 and smith and welch 20 also is consistent with the improving quality of their education nevertheless school quality has not been incorporated into systematic statistical analysis of the racial wage gap this is the main focus of this paper i examine 15 southern states which had data on the segregated white and black school systems i have attempted to link the demonstrated lower quality of education during segregation in the south to the persistent southern wage gap in addition i have tried to

the equity productivity tradeoff public school resources in brazil abstract a governmental welfare function is specified to explore the equity productivity tradeoff in the allocation of governmental schooling resources the constrained maximization model is estimated for brazil using expected incomes in each geographical area as the outcome of interest and governmental resources for each area as the input the equity productivity tradeoff in brazillian governmental preferences is estimated to be considerable with a welfare curvature close neither to the utilitarian nor to the rawlsian extremes but close to the intermediate cobb douglas value this implies neutral rather than reinforcing or compensating behavior in the allocation of governmental resources with the result that the distribution of such resources across areas is more equal than is that of expected incomes

a double hurdle model of cigarette consumption this paper shows the importance of the double hurdle approach for modelling individuals cigarette consumption using data from the uk general household survey and argues that participation and consumption should be treated as separate individual choices the likelihood function for the full double hurdle is derived and it is shown how restrictions on the stochastic specification of the model and auxillary information which identifies ex smokers allow it to be decomposed the empirical results highlight the value of the sample separation information and the need to model starting and quitting as separate decisions

college choice and wages estimates using data on female twins the authors assess the impact of college quality on women s earnings and the influence of family and individual endowments on college choice using new data from a survey of identical and nonidentical twins born in minnesota the estimates reject models that ignore school choice the statistically preferred estimates suggest that ph d granting private universities with well paid senior faculty and smaller enrollments produce students who have significantly higher earnings later in life both the quantity of schooling and the quality of schooling resources are allocated to higher endowed individuals which exacerbates preexisting inequality in human capital and biases conventional estimates of school quality effects copyright 1996 by mit press

the impact of school quality on earnings and educational returns evidence from a low income country abstract the expansion of education has been widely adopted as a key element in the development strategies of low income countries while there is substantial evidence on the benefits of greater educational attainment for subsequent labor market earnings empirical evidence on the role played by school quality is scarce this paper combines household survey data with unique data on school quality from honduras to study the importance of school quality as a determinant of earnings our objective measures of school quality capture teacher training school infrastructure and school crowding the results display strong positive effects of school quality on earnings and on educational returns these effects persist across a variety of model specifications

opportunity inequality and the intergenerational transmission of child labour this paper presents a model in which opportunity differences within society result in child labour where opportunity is broadly defined but can include school quality access to higher paying jobs access to information about the returns to education and actual discrimination if opportunity differences exist child labour and poverty are shown to be symptomatic of this underlying socioeconomic condition it is then shown that policies that ban child labour and or introduce compulsory education laws can actually reduce dynastic welfare increase poverty and further exacerbate income inequality within society because they treat the symptom rather than the disease the lack of opportunity

note the capital asset pricing model and strategic planning response to wernerfelt a response to wernerfelt b 1983 the capital asset pricing model and strategic planning unpublished paper graduate school of business administration university of michigan october

an investigation of the labor market earnings of panamanian males evaluating sources of inequality this paper presents empirical evidence on the determinants of labor market earnings and inequality for males in panama using newly available microdata we estimate earnings equations based on the measurement framework of mincer 1974 and compare them with those for other countries at various stages of economic development we present evidence on two aspects of inequality in less developed economies labor market segmentation and social stratification we present tests of the segmentation hypothesis including several of the dual labor market hypotheses and discuss their inherent ambiguity we also present evidence on the importance of family background for earnings determination and educational attainment

household income and child schooling in vietnam the stronger are the associations between household income and child schooling the lower is intergenerational social mobility and the less equal is opportunity this study estimates the associations between household income and children s school success in vietnam the estimates indicate that these associations are considerable this article also investigates some ways in which policies relate to household incomes school fees are progressive but school fees are only about one third of what households pay directly to schools and are a much smaller proportion of a household s total school related expenditures total household expenditures paid directly to schools increase with household income less proportionately than do school fees alone so the overall structure of such payments is less progressive than is the structure of school fees because school enrollment is positively related to household income moreover the structure of school fees is less progressive for the entire population than for the selected subset that has children enrolled in school further the two school quality measures that have the strongest positive association with children s school success are much more available to higher income households meaning that higher income households have greater school expenditures in part because they are obtaining higher quality schooling and not because charges for the same quality schooling are progressive across income classes

shadow prices and subsides in botswana abstract the government of botswana recently has initiated a financial assistance plan fap to encourage goods production by second best incentives designed to offset distortions in various prices given constraints which preclude first best solutions this innovative plan was adopted after careful consideration of other efforts to remedy distortions in other developing economies and hopes to improve upon those efforts and thereby perhaps be a model for other countries this paper analyzes fap within the framework of the incentives created for a profit maximizing firm the results suggest that it is very difficult to devise indirect second best policies if there is considerable substitution in production possible

quality of higher education and the labor market in developing countries evidence from an education reform in senegal summary while many studies examine the effect of primary education quality on labor market outcomes in developing countries little is known about the effects at higher levels we exploit the quasi experiment provided by a large scale education reform launched in senegal in 2000 to investigate how quality improvements at the university level affect employment our difference in difference estimates suggest that young high skilled workers experienced a nine percentage point employment gain relative to older workers they are also more likely to have better jobs in the service industry or government suggesting a reduction in the mismatch between the quality of high skilled labor demanded and supplied

education employment and earnings of secondary school and university leavers in tanzania evidence from a tracer study this study uses a tracer survey of secondary school completers in tanzania to analyse the impact of educational qualifications on labour market earnings we show that the rates of return to the highest educational qualifications for wage employees are not negligible and at the margin provide an investment incentive however we find little evidence of human capital effects in the earnings determination process for the self employment sector introducing controls for father s educational background and a set of school fixed effects designed to proxy for school quality and potential labour market network effects reduces the estimated rates of return to educational qualifications a comparison of our results with the available evidence from other countries in the region suggest that despite an extremely small secondary and university education system the private rates of return to education in the tanzanian wage employment sector are comparatively low

the effects of education and family planning programs on fertility in indonesia abstract numerous studies indicate that female education is a major determinant of fertility and that the estimated effects are large relative to other variables including family planning program variables there are however two serious deficiencies in the research relating educational attainment to fertility that could give rise to invalid inferences first many public programs including health and family planning programs may influence a woman s decisions about education and these indirect programmatic effects might be large second nearly all existing studies of the impacts of education on fertility assume that a woman s educational attainment is exogenous education could be serving as a proxy for such unobservable determinants as ability motivation and parental background as these factors most likely are important determinants of a woman s educational attainment we use the 1993 indonesian family life survey to compare the estimated impacts of education on fertility from a simple model tha

economic policy changes and wage differentials in latin america abstract this article presents estimates of the impact of changes in liberalization policies on wage differentials by schooling level using a new high quality data set for 18 latin american countries for 1977 98 the method controls for all fixed and time varying country characteristics some of which may affect the policies themselves the results indicate that liberalizing policy changes overall have had a short run disequalizing effect of expanding wage differentials although this effect tends to fade away over time this disequalizing effect is due to the strong impact of domestic financial market reform capital account liberalization and tax reform however privatization contributed to narrowing wage differentials and increasing trade openness had no significant effect on wage differentials technological progress rather than trade flows appears to be a channel through which policy changes are affecting inequality

international comparisons of rural urban educational attainment data and determinants we study cross country differences in rural and urban educational attainment by using a data set comprising 56 countries we focus on the determinants of rural urban educational inequality which is measured by the ratio of rural to urban average years of schooling within each country we find that riskier human capital investment less credit availability a colonial heritage a legal system of french origin and landlockedness of nations are all associated with relatively lower rural educational levels and greater rural urban educational inequality conversely larger formal labor markets better infrastructure and a legal system of british origin are associated with relatively higher rural educational levels and lower rural urban educational inequality we also identify an interaction effect between economic development level and some of these factors in particular we find that as development level increases the negative positive relationship between french british legal systems and rural urban educational inequality is reversed and becomes positive negative

organizational considerations in the evaluation of capital assets toward a resource based view of strategic investment by firms during the last three decades sophisticated techniques for analysis of market investment have been developed by financial economists at the same time however concepts and methods for analysis of resource allocation within firms have lagged behind market theory the analysis of investment within firms has been based primarily on applications of economic theory that exhibit serious weaknesses the special problems associated with analysis of investment in firms have become an important concern of strategic management recent resource based approaches to strategy have developed valuable insights into the limitations of economic analysis of the firm although the resource based work has not yet provided formal methods comparable to the capital asset pricing model it has made important progress in building foundations for an alternative analysis of economic organization this paper explores weaknesses in the financial economic analysis of the firm and examines alternative perspectives in the work on resource based strategy the paper focuses on problems associated with use of market models such as the capm for capital allocation within firms working from basic premises of transaction cost economics the paper identifies important flaws in financial economic techniques for defining hurdle rates for capital projects the paper discusses underlying logical problems associated with the application of market theory to complex organizations and examines ways that alternative approaches to resource allocation have begun to evolve within the field of strategic management

schooling and earnings distributions with endogenous labour force participation marital status and family size this paper investigates the impact of various schooling investment strategies on family and per capita earnings within a framework that integrates effects on earnings family size marital status and labour force participation data are from a 1977 1978 survey of urban nicaraguan women aged 15 45 excerpt

catholic schools dropout rates and educational attainment this paper examines the effect of catholic schooling on high school dropout rates and educational attainment particular attention is given to the effect of selection into the catholic school sector after adjusting for self selection we find that sophomores in the catholic schools are still substantially more likely to graduate with their class it is also shown that seniors in the catholic schools are not more likely to acquire more schooling than other seniors if selection is taken into account

u s cigarette consumption the case of low income women we use double hurdle or cragg models to test whether decisions about smoking participation and consumption levels are separate endogenous choices we also estimate several dominance models which assume that standard corner solutions are not applicable a complete dominance model with independence between the participation and consumption decisions is the preferred specification for our data the most important variables influencing participation are region number of children education and ethnicity region age race ethnicity and health status most affected consumption levels

prices infrastructure household characteristics and child height household survey data from brazil matched with information collected at the municipio county level are used to examine the relation between parental characteristics primarily education community infrastructure and services and child height data are drawn from 2 sources informacoes basicas municipais 1974 is a periodic survey of 4000 municipios on infrastructure health and education services estudo nacional da despesa familiar 1974 75 is a household survey covering 37000 children under age 8 on income expenditure anthropometry and socio demographic characteristics local food price indices were derived from these data child height is significantly affected by local infrastructure particularly modern sewerage and piped water in urban areas and electricity in rural settings these effects are stronger for children over 2 those of better educated mothers and those in households spending more higher prices for dairy products and sugar are linked to lower urban child height and higher fish prices to lower rural child height significantly for children of illiterate mothers higher prices for meat and rice are associated with taller height possible because men usually eat these foods mothers with elementary schooling can counteract the effects of food prices on child height number of teachers is positively related to height in rural children numbers of nurses and of hospital beds is associated with shorter children suggesting that large hospitals locate in poor urban areas this study has succeeded in identifying some public investments that affect child health

what you don t know can hurt you or at least mislead you family behaviors unobserved heterogeneities and the determinants and impacts of human resources over the life cycle what one does not know in the form of unobserved heterogeneity can mislead one in empirical estimates a simple model of intrahousehold allocations illustrates the possible importance of unobserved factors such as abilities in determining human resources and their impacts the author reviews over forty years of studies primarily from latin america and the caribbean but also from elsewhere to illustrate the substantial empirical importance of unobserved heterogeneity with regard to preferences and intrahousehold allocations schooling returns school quality early life nutrition and program evaluation

outstanding female economists in the analysis and practice of development economics abstract this article examines the contributions of five eminent economists all women to the analysis and practice of development economics irma adelman frances stewart and nancy birdsall are leading advocates of alternative development strategies that focus on poverty alleviation and investment in human capital anne krueger and alice amsden stand at the forefront of two opposing camps in a lively and long lasting debate on the appropriate role of government in trade and industrialization we use the storied careers of these economists as a vehicle to convey the big picture of how development economics has evolved and which topics have proved durable