university competition grading standards and grade inflation we develop a model of strategic grade determination by universities distinguished by their distributions of student academic abilities universities choose grading standards to maximize total wages of graduates job placement and wages hinge on a firm s productivity assessment given a student s university grade and productivity signal we identify conditions under which better universities set lower grading standards exploiting the fact that firms cannot distinguish between good and bad a s in contrast a social planner sets stricter standards at better universities we show how increases in skilled jobs drive grade inflation and determine when grading standards fall faster at better schools

do better schools matter parental valuation of elementary education the evaluation of numerous school reforms requires an understanding of the value of better schools given the difficulty of calculating the relationship between school quality and student outcomes i turn to another method and use house prices to infer the value parents place on school quality i look within school districts at houses located on attendance district boundaries houses then differ only by the elementary school the child attends i thereby effectively remove the variation in neighborhoods taxes and school spending i find that parents are willing to pay 2 5 percent more for a 5 percent increase in test scores this finding is robust to a number of sensitivity checks

sex and science how professor gender perpetuates the gender gap nber working paper seriessex and science how professor gender perpetuates the gender gapscott e carrellmarianne e pagejames e westworking paper 14959http www nber org papers w14959national bureau of economic research1050 massachusetts avenuecambridge ma 02138may 2009thanks go to usafa personnel j putnam d stockburger r schreiner k carson and p eglestonfor assistance in obtaining the data and to deb west for data entry thanks also go to charlie brown charles clotfelter caroline hoxby deborah niemeier kim shauman catherine weinberger andseminar participants at nber higher education working group ppic sdsu uc davis uc irvine and uc santa cruz for their helpful comments and suggestions the views expressed in this articleare those of the authors and do not necessarily reflect the official policy or position of the usaf dod the u s government or the national bureau of economic research 2009 by scott e carrell marianne e page and james e west all rights reserved short sectionsof text not to exceed two paragraphs may be quoted without explicit permission provided that fullcredit including notice is given to the source

evolution of the infant health production function michael grossman s seminal publication on the demand for health and health production grossman 1972 has spawned a substantial body of research focusing on the production of infant health this article provides a systematic review of the published literature to date on infant health production and how it has evolved over the past 3 4 decades as data have become more available computing has improved and econometric methods have become more sophisticated while empirical research in most fields has expanded in corresponding ways the infant health production research has become an important part of the broader and inherently multidisciplinary literature on intergenerational health the strongest and most robust findings are that policies matter for infant health particularly those affecting access to health care and that prenatal smoking and other chemical exposures substantially compromise infant health promising directions for future research include elucidating relevant pathways reconciling the largely inconsistent estimated effects of nutrition and education and exploring the roles of preconceptional and lifetime health care paternal factors social support housing complementarity and substitutability of inputs factors that modify effects of inputs and evolving medical technologies

using maimonides rule to estimate the effect of class size on scholastic achievement the twelfth century rabbinic scholar maimonides proposed a maximum class size of 40 this same maximum induces a nonlinear and nonmonotonic relationship between grade enrollment and class size in israeli public schools today maimonides rule of 40 is used here to construct instrumental variables estimates of effects of class size on test scores the resulting identiecation strategy can be viewed as an application of donald campbell s regression discontinuity design to the class size question the estimates show that reducing class size induces a signiecant and substantial increase in test scores for fourth and efth graders although not for third graders when asked about their views on class size in surveys parents and teachers generally report that they prefer smaller classes this may be because those involved with teaching believe that smaller classes promote student learning or simply because smaller classes offer a more pleasant environment for the pupils and teachers who are in them mueller chase and walden 1988 social scientists and school administrators also have a longstanding interest in the class size question class size is often thought to be easier to manipulate than other school inputs and it is a variable at the heart of policy debates on school quality and the allocation of school resources in many countries see e g robinson 1990 for the united states ofsted 1995 for the united kingdom and moshel ravid 1995 for israel this broad interest in the consequences of changing class size

effects of free choice among public schools in this paper i investigate the impact of a programme in tel aviv israel that terminated an existing inter district busing integration programme and allowed students free choice among public schools the identification is based on difference in differences and regression discontinuity designs that yield various alternative comparison groups drawn from untreated tangent neighbourhoods and adjacent cities across identification methods and comparison groups the results consistently suggest that choice significantly reduces the drop out rate and increases the cognitive achievements of high school students it also improves behavioural outcomes such as teacher student relationships and students social acclimation and satisfaction at school and reduces the level of violence and classroom disruption

do premium tax credits increase private health insurance coverage evidence from the 2006 massachusetts health care reform i use the current population survey march supplement and a regression discontinuity design to demonstrate a positive impact of premium tax credits implemented as a part of the 2006 health reform in massachusetts on non group private health insurance coverage

how does peer pressure affect educational investments when effort is observable to peers students may try to avoid social penalties by conforming to prevailing norms to test this hypothesis we first consider a natural experiment that introduced a performance leaderboard into computer based high school courses the result was a 24 percent performance decline the decline appears to be driven by a desire to avoid the leaderboard top performing students prior to the change those most at risk of appearing on the leaderboard had a 40 percent performance decline while poor performing students improved slightly we next consider a field experiment that offered students complimentary access to an online sat preparatory course sign up forms differed randomly across students only in whether they said the decision would be kept private from classmates in nonhonors classes sign up was 11 percentage points lower when decisions were public rather than private honors class sign up was unaffected for students taking honors and nonhonors classes the response depended on which peers they were with at the time of the offer and thus to whom their decision would be revealed when offered the course in a nonhonors class where peer sign up rates are low they were 15 percentage points less likely to sign up if the decision was public but when offered the course in an honors class where peer sign up rates are high they were 8 percentage points more likely to sign up if the decision was public thus students are highly responsive to their peers are the prevailing norm when they make decisions

gender and culture this paper reviews the literature on gender and culture gender gaps in various outcomes competitiveness labor force participation and performance in mathematics amongst many others show remarkable differences across countries and tend to persist over time the economics literature initially explained these differences by looking at standard economic variables such as the level of development women s education the expansion of the service sector and discrimination more recent literature has argued that gender differences in a variety of outcomes could reflect underlying cultural values and beliefs this article reviews the literature on the relevance of culture in the determination of different forms of gender gap i examine how differences in historical situations could have been relevant in generating gender differences and the conditions under which gender norms tend to be stable or to change over time emphasizing the role of social learning finally i review the role of different forms of cultural transmission in shaping gender differences distinguishing between channels of vertical transmission the role of the family horizontal transmission the role of peers and oblique transmission the role of teachers or role models

heterogeneous human capital occupational choice and male female earnings differences human capital models have mainly focused on the rate of return to investment in a homogeneous stock of capital yet individuals have different initial attributes that determine comparative advantage in producing different types of human capital we find that mathematical ability is an important determinant of field choice for college students and that differences in earnings across fields are largely explained as a return to the use of scarce quantitative abilities in the production of each type of human capital the model successfully accounts for the observed male female differences in earnings and occupational choices of recent college graduates

impact of a tertiary eligibility threshold on tertiary education and earnings a discontinuity approach this study uses a discontinuity in the swedish tertiary eligibility requirement to estimate the probability of enrolling in tertiary education and the payoff thereof regression discontinuity results show that achieving tertiary eligibility in upper secondary education increases the probability of enrolling in tertiary education by around 10 15 and 7 percentage points for students who enrolled on an academic and vocational track respectively for academic students this implies 5 higher earnings for men while for women it increases the probability of having positive incomes by 2 thus academic students at the margin of tertiary education receive a substantial tertiary education payoff jel i21 i26 i28

the allocation of public funds in a hierarchical educational system abstract this paper studies the dynamic effects of allocating public funds between basic and advanced education holding the size of total public education funds fixed i identify the effects of their composition on aggregate efficiency and in equality first since basic education is a prerequisite for attending advanced education there exists a lower bound on funding it allocation policies below this lower bound are strictly pareto dominated whether a corresponding lower bound on funding advanced education exists or not depends on the development stage of the economy and the size of total public funds secondly while an allocation policy favoring basic education generates the usual redistribution from top to bottom one favoring advanced education may result in reverse redistribution from bottom to top last through the inter generational link short run allocation policies may have long run effects a simple rule of thumb is that for an economy in its early development stage focusing on basic education for sufficiently long duration is the only way out of polarization and low aggregate efficiency contrary to the actual policies pursued by many of the less developed economies

gender achievement and subject choice in english education in common with other oecd countries there is a gender gap in educational achievement in england favouring girls this carries through to tertiary education on the other hand boys are far more likely to engage in stem in post 16 vocational education and at university the underachievement of boys overall but over representation in stem presents significant challenges for policy this paper documents changes in the gender gap over the last 20 years in england and discusses findings in the light of international evidence it concludes that education policies in academic and in vocational spheres can be designed to reduce gender inequalities that exist in both

making economic welfare analysis useful in the policy process implications of the public choice literature the major use of economic welfare analysis envisioned by its inventors and innovators was to offer guidance to policy makers however in spite of widespread advice by welfare economists many major economic policies that are apparently contrary to accepted principles of welfare economics continue to be employed as a result a common view among economists is that the policy process is often misguided on the other hand those closer to the policy process argue that welfare economists are misguided for example in agricultural policy cochrane argues that the welfare measures derived from the economist s model of perfect competition are irrelevant to actual policy issues with this opinion expressed within policy circles several questions must be raised how can welfare economics be made relevant to actual policy issues why has welfare economics played a role in some policy issues and not in others do cases where principles of welfare economics are not followed represent a failing of the policy process or do these cases represent a failing of economic analysis economists have acknowledged the inapplicability of the perfect competition model in several respects for example in agriculture which is a fairly competitive sector brandow argues that the perfect competition model is far from duplicated in free markets and its assumptions are breathtakingly heroic p 271 nevertheless the competitive norm has continued to be an absolute measuring rod of performance is this practice warranted even when the failure of assumptions is serious under what assumptions is the standard of economic efficiency defined by the competitive norm inappropriate what standards are appropriate this paper addresses some of these issues by drawing on the public choice literature this literature has its roots in welfare economics arrow buchanan and tullock however the public choice literature has diverged markedly from empirical economic welfare practices which yield the advice usually offered to policy makers in broad terms empirical marshallian welfare practices have followed a normative role of evaluating the efficiency of alternative policies suggesting at least implicitly that the most efficient policy should be adopted or that a cost is incurred in not so doing on the other hand much of the public choice literature takes a more positive role of understanding how various policies are chosen and under what conditions those choice processes are appropriate this is the motivation for drawing on the study of public choice to improve the usefulness of economic welfare analysis in the policy process

saving babies revisiting the effect of very low birth weight classification we reconsider the effect of very low birth weight classification on infant mortality we demonstrate that the estimates are highly sensitive to the exclusion of observations in the immediate vicinity of the 1 500 g threshold weakening the confidence in the results originally reported in almond doyle kowalski and williams 2010

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

big business and urban congestion in taiwan the origins of small enterprise and regionally decentralized industry respectively abstract two pillars of taiwan s economy that are regarded as models for other developing countries to follow are small and medium size enterprises smes and regional decentralization of industry this paper suggests that the historical roots of both phenomena make the policies necessary to reproduce the taiwan model elsewhere less straightforward than is typically supposed by the mid 1960s the major factor behind regional decentralization was urban congestion big business seems to have been instrumental in the growth of smes

wage expectations of european college students expected earnings and expected returns to education are seen by labor economists as a major determinant of educational attainment in spite of this the empirical knowledge about expectations and their formation is scarce in this paper we report the results of the first systematic study of the wage expectations of european college students our data are based on the replies to the same questionnaire by more than 6000 college students all over europe we study the determinants of wage expectations and expected employment probabilities the variability of these expectations within a field of study and their variation across universities and fields we also examine the trade off between expected starting wages and wage growth in the final section of the paper we contrast expected returns to education with actual returns estimated from country specific micro data in line with u s studies we find that students overestimate returns to education jel j30

the wage expectations of european business and economics students expected earnings and expected returns to education are seen by labor economists as a major determinant of educational attainment in spite of this the empirical knowledge about expectations and their formation is scarce in this paper we report the results of the first systematic study of the wage expectations of european university students our data are based on a uniform questionnaire answered by about 3 000 business and economics university students across europe we study the determinants of wage expectations and expected employment probabilities the variability of these expectations and their variation across countries and universities we also examine the tradeoff between expected starting wages and expected wage growth

can student effort be manipulated does it matter this article provides evidence that college students effort can be manipulated substantially by making changes in the college testing regime and moreover that student effort is a meaningful input in education production the evidence comes from a quasi experiment where a mid semester test with a pass requirement is introduced to a mandatory one semester business school course in macroeconomics four cohorts of students one before and three after the introduction of the pass requirement have reported their study effort twice during the semester and the relationship between achievement and study effort is investigated by using a within subject within student across study periods approach

can achievement peer effect estimates inform policy a view from inside the black box abstract empirical studies of peer effects rely on the assumption that peer spillovers can be measured through observables however in the education context many theories of peer spillovers center around unobservables such as ability effort or motivation i show that when peer effects arise from unobservables the typical empirical specifications will not measure these effects accurately which may help explain differences in the magnitude and even sign of peer effect estimates across studies i also show that under reasonable assumptions these estimates cannot be applied to determine the effects of regrouping students a central motivation of the literature

the medium term effects of scholarships in a low income country despite progress in recent decades a substantial fraction of children in developing countries attain little schooling and many adults lack skills that are valued in the labor market we evaluate the medium term effects of a program that provided scholarships for three years to poor children upon graduation from elementary school in cambodia a low income country to do this we use a sharp regression discontinuity design we show that scholarships have substantial effects on school attainment by the time children would have been in grade 11 had they remained in school two years after they stopped being eligible for scholarships those who were offered scholarships have attained 0 6 more grades of completed schooling nevertheless we find no evidence that scholarships had significant effects on test scores employment earnings or the probability of getting married or having a child in adolescence

early life health interventions and academic achievement this paper studies the effect of improved early life health care on mortality and long run academic achievement in school we use the idea that medical treatments often follow rules of thumb for assigning care to patients such as the classification of very low birth weight vlbw which assigns infants special care at a specific birth weight cutoff using detailed administrative data on schooling and birth records from chile and norway we establish that children who receive extra medical care at birth have lower mortality rates and higher test scores and grades in school these gains are in the order of 0 15 0 22 standard deviations

sunset time and the economic effects of social jetlag evidence from us time zone borders abstract the rapid evolution into a 24 h society challenges individuals ability to conciliate work schedules and biological needs epidemiological research suggests that social and biological time are increasingly drifting apart social jetlag this study uses a spatial regression discontinuity design to estimate the economic cost of the misalignment between social and biological rhythms arising at the border of a time zone in the presence of relatively rigid social schedules e g work and school schedules exploiting the discontinuity in the timing of natural light at a time zone boundary we find that an extra hour of natural light in the evening reduces sleep duration by an average of 19 minutes and increases the likelihood of reporting insufficient sleep using data drawn from the centers for disease control and prevention and the us census we find that the discontinuity in the timing of natural light has significant effects on health outcomes typically associated with circadian rhythms disruptions e g obesity diabetes cardiovascular diseases and breast cancer and economic performance per capita income we provide a lower bound estimate of the health care costs and productivity losses associated with these effects

intersectoral linkages and the role of the state in shaping the conditions of industrial accumulation a study of ludhiana s manufacturing industry abstract this article traces the historical and institutional sources of small firm competitiveness in ludhiana s manufacturing sector four features emerge as salient the indirect historical links and dynamics between the region s industrial and agrarian sectors past policies and the key role of the state in indirectly transforming the local skill base and creating the conditions for small scale accumulation among skilled metal workers demand surges early in the region s industrial history and complex ties among firms of different sizes that created a capital conserving interdependent production network in the region these processes together help explain why despite being located hundreds of miles from any mineral or resource base firms in this region outcompeted others in the country to dominate national markets in the sectors in which they specialized bicycles and parts sewing machines and woolen hosiery

information asymmetry and equilibrium monitoring in education abstract we develop a theoretical and computational model of school choice and achievement that embeds information asymmetries in the provision of education because school effort is unobservable to households and policymakers schools have an incentive to under provide effort this moral hazard affects both public and private schools although public schools are subject to an additional distortion because of limited competition and fixed funding household monitoring of schools can mitigate moral hazard but some households may free ride on the monitoring of others using our calibrated model we simulate two policies aimed at raising achievement public monitoring of public schools and private school vouchers our results indicate that in large scale settings no single tool may suffice the reason is twofold a no tool raises achievement or welfare for all households and b since the extent of moral hazard is endogenous the application of each tool has unintended consequences that limit its own effectiveness results also indicate that setting the policy parameters for public schools at the levels preferred by the majority of households may mitigate the distortions nonetheless the current actual values of these parameters seem to match more closely the preferences of public schools than the preferences of parents

estimating marginal returns to medical care evidence from at risk newborns a key policy question is whether the benefits of additional medical expenditures exceed their costs we propose a new approach for estimating marginal returns to medical spending based on variation in medical inputs generated by diagnostic thresholds specifically we combine regression discontinuity estimates that compare health outcomes and medical treatment provision for newborns on either side of the very low birth weight threshold at 1500 grams first using data on the census of us births in available years from 1983 2002 we find that newborns with birth weights just below 1500 grams have lower one year mortality rates than do newborns with birth weights just above this cutoff even though mortality risk tends to decrease with birth weight one year mortality falls by approximately one percentage point as birth weight crosses 1500 grams from above which is large relative to mean infant mortality of 5 5 just above 1500 grams second using hospital discharge records for births in five states in available years from 1991 2006 we find that newborns with birth weights just below 1500 grams have discontinuously higher charges and frequencies of specific medical inputs hospital costs increase by approximately 4 000 as birth weight crosses 1500 grams from above relative to mean hospital costs of 40 000 just above 1500 grams under an assumption that observed medical spending fully captures the impact of the very low birth weight designation on mortality our estimates suggest that the cost of saving a statistical life of a newborn with birth weight near 1500 grams is on the order of 550 000 in 2006 dollars

housing wealth and labor supply evidence from a regression discontinuity design abstract this paper uses the discontinuity in house size generated by chinese housing policies to identify the effect of housing wealth on labor supply the analysis finds a substantial deterrent effect of housing wealth on labor supply much of the housing wealth effect comes from the labor participation decision with the effect on employed workers being ambiguous females young generation and households with high repayment capacity are more responsive to gains in housing wealth

school heterogeneity human capital accumulation and standards abstract this paper examines the effects of heterogeneity in school quality on high school wages college enrolment rates and social surplus greater heterogeneity in school quality combined with pooling on the labor market for high school graduates is shown to result in lower average high school wages inefficient college going decisions and in some cases lower social surplus these effects of heterogeneity tend to be reinforced by technical change which raises the return to human capital technical change leads to bigger increases in the college high school wage ratio when there is more underlying heterogeneity in the school system performance standards implemented through the mandatory testing of all high school graduates are shown to raise average high school wages and social surplus by reducing the distortion in college going incentives

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

do gender stereotypes reduce girls or boys human capital outcomes evidence from a natural experiment schools and teachers are often said to be a source of stereotypes that harm girls this paper tests for the existence of gender stereotyping and discrimination by public high school teachers in israel it uses a natural experiment based on blind and non blind scores that students receive on matriculation exams in their senior year using data on test results in several subjects in the humanities and sciences i found contrary to expectations that male students face discrimination in each subject these biases widen the female male achievement difference because girls outperform boys in all subjects except english and at all levels of the curriculum the bias is evident in all segments of the ability and performance distribution and is robust to various individual controls several explanations based on differential behavior between boys and girls are not supported empirically however the size of the difference is very sensitive to teachers characteristics suggesting that the bias against male students is the result of teachers and not students behavior

food price policy the rationale for government intervention abstract policy makers in the most successful developing countries have not accepted either of the two major schools of thought on food price policy the neo classical school favours free trade to maximize efficiency of resource allocation the structuralist school favours interventions to satisfy goals for income distribution especially in the rapidly growing rice based economies of asia policy makers have been more concerned about stability of domestic prices than their level relative to world prices this concern traditionally dismissed by economists as purely political is justified on economic grounds because of improved macroeconomic and dynamic efficiency from stable food prices the paper identifies both the benefits from food price stability and the costs of achieving it

weighing the military option the effects of wartime conditions on investments in human capital serving in the military is an important vehicle through which young americans invest in their human capital as such changes in the desirability of military service may affect the attainment of enlistment requirements such as a high school degree or equivalent using american community survey data we find that exposure to home state combat fatalities during the iraq and afghanistan wars decreased the probability of high school completion and increased the probability of general equivalency diploma completion using military data we confirm that exposure to home state fatalities selectively deterred some individuals from enlisting the results suggest military service and educational investments are complements jel i20 i26 j24

optimal higher education enrollment and productivity externalities in a two sector model abstract we analyze the optimal share of the skilled workforce over the course of development with two sectors using skilled and unskilled labor respectively and technological spillovers from higher education enrollment productivity in each sector depends on the average quality of workers and the size of the workforce when skill biased technological change prevails this structure of externalities coupled with the endogenous ability sorting of workers may well produce a pattern of overenrollment in early and late stages of development and underenrollment in between our normative analysis is followed by a positive analysis exploring how policy would differ under alternative political objectives

returns to education quality for low skilled students evidence from a discontinuity this paper studies the labor market returns to quality of higher education for low skilled students using a regression discontinuity design we compare students who marginally pass and marginally fail the french high school exit exam from the first attempt threshold crossing leads to an improvement in the quality but has no effect on the quantity of higher education pursued specifically students who marginally pass are more likely to enroll in stem majors and universities with better peers further marginally passing increases earnings by 13 6 percent at the age of 27 to 29 our findings show that low skilled students experience large gains from having the opportunity to access higher quality postsecondary education

grade inflation social background and labour market matching a model is presented where workers of differing abilities and from different social backgrounds are assigned to jobs based on grades received at school it is examined how this matching is affected if good grades are granted to some low ability students such grade inflation is shown to reduce the aggregate wage of the lower class workers because employers use social origin as a signal for productivity if grades are less than fully informative moreover the high ability students from the higher class may benefit from grade inflation since this shields them from the competition on the part of able students from the lower classes

real costs of nominal grade inflation new evidence from student course evaluations college gpas in the united states rose substantially between the 1960 s and the 2000 s over the same period study time declined by almost a half this paper uses a 12 quarter panel of course evaluations from the university of california san diego to discern whether a link between grades and effort investment holds up in a micro setting results indicate that average study time would be about 50 lower in a class in which the average expected grade was an a than in the same course taught by the same instructor in which students expected a c simultaneity suggests estimates are biased toward zero findings do not appear to be driven primarily by the individual student s expected grade but by the average expected grade of others in the class class specific characteristics that generate low expected grades appear to produce higher effort choices evidence that nominal changes in grades may lead to real changes in effort investment

on the origins of gender roles women and the plough the study examines the historical origins of existing cross cultural differences in beliefs and values regarding the appropriate role of women in society we test the hypothesis that traditional agricultural practices influenced the historical gender division of labor and the evolution of gender norms we find that consistent with existing hypotheses the descendants of societies that traditionally practiced plough agriculture today have less equal gender norms measured using reported gender role attitudes and female participation in the workplace politics and entrepreneurial activities our results hold looking across countries across districts within countries and across ethnicities within districts to test for the importance of cultural persistence we examine the children of immigrants living in europe and the united states we find that even among these individuals all born and raised in the same country those with a heritage of traditional plough use exhibit less equal beliefs about gender roles today jel codes d03 j16 n30 copyright 2013 oxford university press

does it pay to attend an elite private college cross cohort evidence on the effects of college type on earnings although a substantial and rising labor market premium is associated with college attendance in general little is known about how this premium varies across institutions of different types and across time in this paper we explicitly model high school students choice of college type characterized by selectivity and control based on individual and family characteristics including ability and parental economic status and an estimate of the net costs of attendance we estimate selectivity corrected outcome equations using data from both the national longitudinal study of the high school class of 1972 and high school and beyond which permit us to determine the effects of college quality on wages and earnings and how this effect varies across time even after controlling for selection effects strong evidence emerges of a significant economic return to attending an elite private institution and some evidence suggests this premium has increased over time

shifting foundations of agricultural policy analysis welfare economics when risk markets are incomplete the neat alignment of resources output and prices specified by the perfect competition model is far from duplicated in free markets and the equally neat alignment assumed under the constraints of a program is not experienced when programs are in effect in particular areas under empirically determined supply curves are unlikely to represent opportunity costs the basic theory is invaluable in providing a conceptual orientation for the analysis of programs but the assumptions implicit in the literal use of simple forms of it for policy conclusions are breathtakingly heroic

peer effects in program participation the influence of peers could play an important role in the take up of social programs however estimating peer effects has proven challenging given the problems of reflection correlated unobservables and endogenous group membership we overcome these identification issues in the context of paid paternity leave in norway using a regression discontinuity design our approach differs from existing literature which attempts to measure peer effects by exploiting random assignment to peer groups in contrast we study peer effects in naturally occurring peer groups but exploit random variation in the price of a social program for a subset of individuals fathers of children born after april 1 1993 in norway were eligible for one month of governmental paid paternity leave while fathers of children born before this cutoff were not there is a sharp increase in fathers taking paternity leave immediately after the reform with take up rising from 3 to 35 while this quasirandom variation changed the cost of paternity leave for some fathers and not others it did not directly affect the cost for the father s coworkers or brothers therefore any effect on the brother or the coworker can be attributed to the influence of the peer father in their network our key findings on peer effects are four fold first we find strong evidence for substantial peer effects of program participation in both workplace and family networks coworkers and brothers are 11 and 15 percentage points respectively more likely to take paternity leave if their peer father was induced to take up leave by the reform second the most likely mechanism is information transmission about costs and benefits including increased knowledge of how an employer will react third there is essential heterogeneity in the size of the peer effect depending on the strength of ties between peers highlighting the importance of duration intensity and frequency of social interactions fourth the estimated peer effect gets amplified over time with each subsequent birth exhibiting a snowball effect as the original peer father s influence cascades through a firm our findings demonstrate that peer effects can lead to long run equilibrium participation rates which are substantially higher than would otherwise be expected

rates of return to four year university education an application of regression discontinuity design estimating the rate of return to university education is invariably difficult due to the problem of omitted variable bias using a regression discontinuity design we estimate the effect of four year university education on earnings and explore the pathways through which the effect operates our estimation exploits the centralized score based college university admission system in china where the minimum scores required for university admission are externally determined by the provincial governments our findings suggest that being eligible for four year university admission implies a sizable increase in earnings with the payoff being attributable to prolonged length of education and improvements in education quality although the quality effects may not be precisely estimated this article is protected by copyright all rights reserved

inference in regression discontinuity designs with a discrete running variable we consider inference in regression discontinuity designs when the running variable only takes a moderate number of distinct values in particular we study the common practice of using confidence intervals cis based on standard errors that are clustered by the running variable as a means to make inference robust to model misspecification lee and card 2008 we derive theoretical results and present simulation and empirical evidence showing that these cis do not guard against model misspecification and that they have poor coverage properties we therefore recommend against using these cis in practice we instead propose two alternative cis with guaranteed coverage properties under easily interpretable restrictions on the conditional expectation function

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

information and economic analysis a perspective ten years ago i delivered a paper before this group with the title information and economic analysis i chose the title deliberately i did not call the subject on which i was speaking the economics of information because to do so would have been to suggest that my topic like the economics of agriculture or the economics of industry or the economics of labour represented another branch of specialisation within economics i wanted to suggest that informational considerations were in fact central to the analysis of a wide variety of phenomena that they constituted a central part of the foundations of economic analysis at the time though economists had long paid lip service to the importance of information there was little formal literature the last decade has seen a burgeoning of the literature it has become to the late 7o s and early 8o s what growth theory was to the early 6o s and it has been greeted with some of the same scepticism there seems to be a myriad ofspecial cases and few general principles the little examples are often contrasted unfavourably with the generality of general equilibrium theory what have we learned have diminishing returns set in are there fruitful directions for future research and if so what are they these are the questions which i wish to address here the work of the past decade has made i think a fundamental and lasting contribution to economic analysis the contributions have been both negative and positive we have learned that much of what we believed before is of only limited validity that the traditional competitive equilibrium analysis though having the superficial appearance of generality in terms of superscripts and subscripts is indeed not very general the theory is not robust to slight alterations in the informational assumptions it is but a special and not very plausible example among the possible set of informational assumptions which can be employed to characterise an economy at the same time the theory has been able to provide insights into phenomena about which the traditional model had nothing to say or which seemed inconsistent or inexplicable within the competitive paradigm it has provided some of the micro foundations for macro economics it has provided the basis of a new theory of the firm of a new new welfare economics and of a theory of economic organisation including a comparison of economic

peer effects in higher education does the field of study matter does the peer effect vary with the field of study using data from a middle sized public university located in southern italy and exploiting the random assignment of first year students to college accommodation we find that roommate peer effects for freshmen enrolled in the hard sciences are positive and significantly larger than for freshmen enrolled in the humanities and social sciences we present a simple theoretical model which suggests that the uncovered differences between fields in the size of the peer effect could plausibly be generated by between field variation in labor market returns which affect optimal student effort jel i21 z13 j24 i introduction understanding the nature and importance of peer group effects in education is crucial for education policy peer effects are relevant for school choice tracking affirmative action selective admissions and the sources of school quality empirical research which seeks to estimate the existence size and non linearity of peer effects has run into several problems including the self selection reflection and correlated effects described by manski 1993 following sacerdote 2001 and zimmerman 2003 a popular approach in this literature has been to investigate roommate peer effects because in a number of universities and colleges the allocation of students to rooms can be argued

entry through the narrow door the costs of just failing high stakes exams abstract in many countries important thresholds in examinations act as a gateway to higher levels of education and or improved employment prospects this paper examines the consequences of just failing a particularly important high stakes national examination taken at the end of compulsory schooling in england it uses unique administrative data including full information on both initial and regraded exam marks to show that students of the same ability have significantly different educational trajectories depending on whether they just pass or fail this exam three years later students who just fail to achieve the required threshold have a lower probability of entering an upper secondary high level academic or vocational track and of starting tertiary education those who fail to pass the threshold are also more likely to drop out of education by age 18 without some form of employment the moderately high effects of just passing or failing to pass the threshold in this high stakes exam has high potential long term consequences for those affected

what happens when the insurer can say no assessing prior authorization as a tool to prevent high risk prescriptions and to lower costs abstract insurers are increasingly requiring physicians to obtain prior authorization before prescribing drugs that are costly or have high abuse potential these prior authorization requirements have the potential to reduce risky prescriptions and to lower prescription drug costs but little is known about their ability to do either this study estimates the effect of a prior authorization requirement for certain costly and abuse prone drugs on prescription drug use and costs for work related injuries in texas the findings indicate that the prior authorization requirement reduces the likelihood that claimants receive non preferred drugs as well as insurers spending on non preferred drugs while there is some substitution to preferred drugs i do not find evidence of large increases in spending on preferred drugs the estimated effects on average total pharmacy spending are imprecise though there is suggestive evidence that the prior authorization requirement reduces the likelihood that a claim has high prescription drug costs the results provide strong evidence that the prior authorization requirement drastically reduces the likelihood that patients receive combinations of drugs that have contributed disproportionately to the rise in prescription drug overdoses despite the success of prior authorization in lowering spending on non preferred drugs and in reducing high risk prescriptions i find little evidence that prior authorization has disproportionately large effects on the most dangerous prescription drug use and only weak suggestive evidence that it has larger effects on prescription drug use that likely arises because physicians are not fully informed suggesting that prior authorization requirements do not necessarily target the riskiest drug use

efficient tuition fees and examinations we assume that students observe only a private noisy signal of their ability and that universities can condition admission decisions on the results of noisy tests if the university observes a private signal of each student s ability which is soft information then asymmetries of information are two sided and the optimal admission policy involves a mix of pricing and pre entry selection based on the university s private information in contrast if all test results are public knowledge then there is no sorting on the basis of test scores tuition alone does the job of implementing an optimal degree of student self selection these results do not depend on the existence of peer effects the optimal tuition follows a classic marginal social cost pricing rule jel d82 h42 i22 j24

heaping induced bias in regression discontinuity designs heaping induced bias in rd designs this study uses monte carlo simulations to demonstrate that regression discontinuity designs arrive at biased estimates when attributes related to outcomes predict heaping in the running variable after showing that our usual diagnostics may not be well suited to identifying this type of problem we provide alternatives and then discuss the usefulness of different approaches to addressing the bias we then consider these issues in multiple non simulated environments

balance sheet insolvency and contribution revenue in public charities abstract using form 990 data reported by public charities we document significant bunching of nonprofits at near zero net assets the threshold for insolvency bunching occurs despite the fact that creditors cannot force insolvent nonprofits into involuntary bankruptcy we show that the extent of bunching is greater among organizations that rely more heavily on contribution revenue and that by inflating their net assets bunching organizations are able to increase their contribution revenue relative to firms that report negative net assets charitable donors appear to use the net assets threshold as a heuristic for a charity s financial health nonprofit managers in turn respond to the preferences of their donors

orchestrating impartiality the impact of blind auditions on female musicians a change in the audition procedures of symphony orchestras adoption of blind auditions with a screen to conceal the candidate s identity from the jury provides a test for sex biased hiring using data from actual auditions in an individual fixed effects framework we find that the screen increases the probability a woman will be advanced and hired although some of our estimates have large standard errors and there is one persistent effect in the opposite direction the weight of the evidence suggests that the blind audition procedure fostered impartiality in hiring and increased the proportion women in symphony orchestras

endogenous determination of public budget allocation across education stages abstract this paper studies the endogenous determination of public budget allocation across hierarchical education stages in less developed economies the top class has dominant political power to implement its most preferred policy which is characterized by exclusive participation and large schooling expenditure at higher education at the expense of basic education in developed economies the budget allocation is more balanced under certain parameters it leads to expanded participation of the middle class in higher education the model offers an explanation to the observed cross country policy difference and is broadly consistent with historical evidence

do high grading standards affect student performance abstract this paper explores the effects of high grading standards on student test performance in elementary school while high standards have been advocated by policy makers business groups and teacher unions very little is known about their effects on outcomes most of the existing research on standards is theoretical generally finding that standards have mixed effects on students however very little empirical work has to date been completed on this topic this paper provides the first empirical evidence on the effects of grading standards measured at the teacher level using an exceptionally rich set of data including every third fourth and fifth grader in a large school district over four years we match students test score gains and disciplinary problems to teacher level grading standards in models in which we control for student level fixed effects we find substantial evidence that higher grading standards benefit students and that the magnitudes of these effects depend on the match between the student and the classroom while dynamic selection and mean reversion complicate the estimated effects of grading standards they tend to lead to understated effects of standards

a simple model of educational standards the author models standards for educational credentials such as high school diplomas standard setters maximize their conception of social welfare knowing that utility maximizing students choose whether to meet the standard the author shows that more egalitarian policymakers set lower standards the median voter would prefer higher standards under symmetric distributions and decentralization lowers standards among identical communities optimal standards do not necessarily fall with increased student preference for leisure deterioration of nonstudent inputs to education or increased student heterogeneity superseding binary credentials by perfect information increases average achievement and social welfare for plausible degrees of heterogeneity egalitarianism and pooling under decentralization

crime scars recessions and the making of career criminals recessions lead to short term job loss lower levels of happiness and decreasing income levels there is growing evidence that workers who first join the labour market during economic downturns suffer from poor job matches that have a sustained detrimental effect on their wages and career progression this paper uses a range of us and uk data to document a more disturbing long run effect of recessions young people who leave school in the midst of recessions are significantly more likely to lead a life of crime than those graduating into a buoyant labour market these effects are long lasting and substantial

the effect of language training on immigrants economic integration empirical evidence from france abstract we examine the impact of language training on the economic integration of immigrants in france the assignment to this training offered by the french ministry of the interior depends mainly on a precise rule the training is provided if the test score of an initial language exam is below a certain threshold this eligibility rule creates a discontinuity in the relation between the test result and the variables of interest which is used to estimate the causal effect of language training through the method of regression discontinuity design we find that the number of assigned hours of training significantly increases labor force participation of the treated individuals the language classes appear to have a larger effect for individuals with higher levels of education while there is no robust differential effect by type of migration gender or age our estimated coefficients are remarkably similar when we rely on local linear regressions using the optimal bandwidth with few observations around the threshold and when we control parametrically for a polynomial of the forcing variable and use the whole estimation sample we conclude with a discussion of the candidate mechanisms for the improved labor market participation of immigrants

how do hospitals respond to managed care evidence from at risk newborns abstract medicaid has increasingly transitioned from a government run fee for service system ffs to a managed care system mmc administered by private insurers to examine the effect of mmc i exploit an arbitrary determinant of mmc enrollment in new york state infants weighing less than 1200 g were excluded from mmc and were instead served through ffs i find evidence that mmc reduces hospital costs at birth which is driven by infants born in new york city the hospital cost reductions arise from shortening the lengths of stay and encouraging inter hospital transfers these results are consistent with health plans influencing hospitals to reduce the intensity of treatment and steering patients away from high cost hospitals

environmental and agricultural policy linkages and reforms in the united states under the gatt the initial design of the uruguay round of the gatt negotiations was laudable in many respects the round has been unique in its concentration on agriculture and its attempt to focus on internal distorting policies agricultural tradedistorting policies were recognized by the initial designers as a means for rationalizing internal policies that support domestic agricultural sectors as a result it should be no surprise that the negotiating performance thus far during the uruguay round can be traced largely to the conflict over internal agricultural policies

on the origins of gender gaps in human capital short and long term consequences of teachers biases abstract we estimate the effect of primary school teachers gender biases on boys and girls academic achievements during middle and high school and on the choice of advanced level courses in math and sciences during high school in tel aviv israel we measure bias using class gender differences in scores between school exams graded by teachers and national exams graded blindly by external examiners for identification we rely on the random assignment of teachers and students to classes in primary schools our results suggest that assignment to a teacher with a greater bias in favor of girls boys has positive effects on girls boys achievements such gender biases have also positive impact on girls boys enrollment in advanced level math courses in high school these results suggest that teachers biased behavior at early stages of schooling has long run implications for occupational choices and earnings at adulthood because enrollment in advanced courses in math and science in high school is a prerequisite for post secondary schooling in engineering computer science and so on

does early access to pension wealth improve health we examine the health impacts of early access to public pension wealth by exploiting a unique policy in singapore allowing individuals to withdraw a proportion of their pension savings after their 55th birthday for the identification we employ a regression discontinuity design by comparing individuals before and after their 55th birthday to address anticipated and lagged health impacts we adopt the donut regression discontinuity approach using nationally representative monthly panel data we find that early access to pension wealth improves self reported overall health

the essential economics of threshold based incentives theory estimation and evidence from the western states 100 abstract many public and private entities utilize incentive systems in which improvements in measured performance are rewarded only when the agent crosses some pre specified threshold this paper comprehensively analyzes the effects of these incentive systems on effort the net benefits of effort and the accuracy of information about agents performance and lays out methods for estimating each these methods are then used to reveal the motivations physiological limits and racing strategy of ultramarathoners trying to complete a one hundred mile race in under twenty four hours

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

federalism partial prohibition and cross border sales evidence from recreational marijuana abstract marijuana is partially prohibited though banned federally it is available to 1 in 4 u s adults under state statutes we measure the size of the interstate trade generated by state level differences in legal status with a natural experiment oregon allowed stores to sell marijuana for recreational use on october 1 2015 next to washington where stores had been selling recreational marijuana since july 2014 using administrative data covering the universe of washington s sales and a differences in discontinuities approach we find retailers along the oregon border experienced a 36 decline in sales immediately after oregon s market opened we investigate the home location of recent online reviewers of marijuana retailers and find similar cross border patterns by the end of washington s 2018 fiscal year our results imply that washington had earned between 44 million and 75 million in tax revenue from cross border shoppers these cross border incentives may create a race to legalize

the role of hospital heterogeneity in measuring marginal returns to medical care a reply to barreca guldi lindo and waddell in almond doyle kowalski and williams 2010 we describe how marginal returns to medical care can be estimated by comparing patients on either side of diagnostic thresholds our application examines at risk newborns near the very low birth weight threshold at 1500 grams we estimate large discontinuities in medical care and mortality at this threshold with effects concentrated at lowquality hospitals while our preferred estimates retain newborns near the threshold when they are excluded the estimated marginal returns decline although they remain large in low quality hospitals our estimates are similar in magnitude regardless of whether these newborns are included or excluded in almond doyle kowalski and williams 2010 adkw we describe how diagnostic thresholds can provide plausibly exogenous variation in medical care for patients near the threshold regression discontinuity estimates for differences in medical care and health outcomes at the threshold can then be combined to estimate marginal returns to medical care our application is the very low birth weight vlbw threshold at 1500 grams newborns weighing slightly less than 1500g receive more medical care and have lower mortality compared to those weighing slightly more the empirical estimates suggest large returns to medical care for these at risk newborns figure i of adkw is a histogram of reported births near 1500g showing pronounced mass points at whole ounces and smaller mass points at 100g intervals motivated by this histogram barreca guldi lindo and waddell bglw examine a series of alternative specifications initially they exclude newborns with reported birth weights at exactly 1500g the estimated mortality discontinuity on this sample is smaller in magnitude although it continues to be both statistically and economically significant subsequently they exclude successively larger sets of newborns up to a maximum of 1497g to 1503g inclusive a sample restriction that removes 25 of the control observations and 0 38 of the treatment observations with the asymmetry due to a mass point at 1503g 3lbs 5oz the estimated mortality discontinuity on this sample declines somewhat and is no longer statistically significant although there is no general economic or statistical case for exclusion of observations at or around the threshold in a regression discontinuity rd design given the specific details of our

can centralized educational standards raise welfare abstract i examine conditions under which centralized educational standards raise welfare compared to decentralization in this model a uniform centralized standard only raises welfare when there is excessive cross district pooling of graduates by employers high cross district heterogeneity of students and high degrees of egalitarianism can surprisingly favor centralization in other cases centralization can lower standards in all districts including the weakest the cross district patterns of winners and losers among high and low achievers depend crucially on the degree of cross district pooling finally i show that centralized standards with a local option to set higher standards are always welfare improving

the effect of health insurance on home payment delinquency evidence from aca marketplace subsidies abstract we use administrative tax data and survey responses to quantify the effect of subsidized health insurance on rent and mortgage delinquency we employ a regression discontinuity rd design exploiting the income threshold for receiving marketplace subsidies in states that did not expand medicaid under the affordable care act among households targeted by the policy eligibility for subsidies is associated with a roughly 25 decline in the delinquency rate and reduced exposure to out of pocket medical expenditure risk iv treatment effects are significant indicating that the decline in the delinquency rate is related to participation in health insurance we show that under plausible assumptions the social benefits implied by our rd estimates in terms of fewer evictions and foreclosures are substantial

academic admissions standards implications for output distribution and mobility we examine the trade offs implicit in academic admissions standards when students are charged cost based tuition and offered loans that remove liquidity constraints lowering entry requirements while holding graduation requirements fixed increases aggregate output and promotes a more equal distribution of wages but reduces relative income mobility and diminishes the scope for affirmative action lowering admissions standards while raising graduation requirements so that the number of graduates remains constant has little direct effect on output distribution or mobility but again reduces the scope for affirmative action income based affirmative action offers a better trade off between output and relative mobility than income neutral admissions jel d31 h42 i23 i28 j24

school quality and black white relative earnings a direct assessment the wage differential between black and white men fell from 40 percent in 1960 to 25 percent in 1980 it has been argued that this convergence reflects improvements in the relative quality of black schools to test this hypothesis we assembled data on pupil teacher ratios annual teacher pay and term length for black and white schools in the eighteen segregated states from 1915 to 1966 these data are linked to estimated returns to education for southern born men from different cohorts and states in 1960 1970 and 1980 improvements in the relative quality of black schools explain 20 percent of the narrowing of the black white earnings gap between 1960 and 1980

heaping induced bias in regression discontinuity designs this study uses monte carlo simulations to demonstrate that regression discontinuity designs arrive at biased estimates when attributes related to outcomes predict heaping in the running variable after showing that our usual diagnostics may not be well suited to identifying this type of problem we provide alternatives and then discuss the usefulness of different approaches to addressing the bias we then consider these issues in multiple non simulated environments jel c21 c14 i12

the effects of class size on student achievement new evidence from population variation abstract i identify the effects of class size on student achievement using longitudinal variation in the population associated with each grade in 649 elementary schools i use variation in class size driven by idiosyncratic variation in the population i also use discrete jumps in class size that occur when a small change in enrollment triggers a maximum or minimum class size rule the estimates indicate that class size does not have a statistically significant effect on student achievement i rule out even modest effects 2 to 4 percent of a standard deviation in scores for a 10 percent reduction in class size

the impact of educational standards on the level and distribution of earnings the goal of this paper is to present the following finding an egalitarian policy maker might prefer higher standards than would a policy maker whose goal was to maximize the sum of earnings the result is based on the observation that if workers are differentiated with respect to ability an increase in educational standards will increase the earnings of both the most able and the least able workers the only workers whose earnings fall are those workers who after the increase fail to continue meeting the standard

peer group effects on the academic performance of italian students we analyse peer effects among students of a middle sized italian public university we explain students average grade in exams passed during their second level degree course on the basis of their pre determined measures of abilities personal characteristics and peer group abilities thanks to a rich administrative data set we are able to build a variety of definitions of peer groups describing different kinds of students interaction based on classes attended together or exams taken in the same session self selection problems are handled through two stage least squares estimations using as an instrument the exogenous assignment of students to different teaching classes in the compulsory courses attended during their first level degree course we find statistically significant positive peer group effects which are robust to the different definitions of peer group and to different measures of abilities

small firms and their helpers lessons on demand abstract small enterprise se programs are currently the rage because of their potential to create employment they are typically supply driven providing standardized training technical assistance credit but most cases of se based growth have involved demand driven support provided by large customers firms traders government agencies state enterprises this article argues that such inherently customized support constitutes a better way to deliver services to ses and is more likely to stimulate sustained se growth with respect to se favoring procurement by government in particular we show that this can be done without running up against the problems of similar attempts in the past and in a way that also reduces the costs of running government we draw for illustration from a successful case of se favoring procurement in the brazilian state of ceara

regression discontinuity designs based on population thresholds pitfalls and solutions in many countries important features of municipal government such as the electoral system mayors salaries and the number of councillors depend on whether the municipality is above or below arbitrary population thresholds several papers have used a regression discontinuity design rdd to measure the effects of these threshold based policies on political and economic outcomes using evidence from france germany and italy we highlight two common pitfalls that arise in exploiting population based policies compound treatment and sorting and we provide guidance for detecting and addressing these pitfalls even when these problems are present population threshold rdd may be the best available research design for studying the effects of certain policies and political institutions