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- Minimum wages and skill acquisition: another look at schooling effects
This article re-examines evidence on the effects of minimum wages on schooling in an attempt to reconcile some of the contradictory findings from more recent research. Evidence from the US Current Population Survey (CPS) data from the late 1970s and 1980s is examined. This period of time was characterised by a number of state-level minimum wage increases and several research studies on the effects of minimum wages. Research findings from the 1990s are also examined. The authors find that evidence consistently points to negative effects of minimum wages on school enrolment, augmenting the findings of a number of recent studies, as well as some earlier ones, and countering claims that appear to overturn some of this evidence. The authors conclude that the minimum wage reduces the proportion of young people in school and that increases in the minimum wage result in employers recruiting enrolled youth and a significant increase in the proportion of non-enrolled youth without jobs. Along with research on the effects of minimum wages on training, the evidence suggests that minimum wages reduce skill acquisition among young people. It is suggested that this area is far less researched than the employment effects of minimum wages and that, now a causal effect of minimum wages on schooling has been established, further research is needed to analyse why this effect arises and how it may differ across families and other dimensions.
This article re-examines evidence on the effects of minimum wages on schooling in an attempt to reconcile some of the ... Show Full Abstract
Authors: Neumark, David; Wascher, William
Geographic subjects: North America; United States
Journal title: Economics of education review
Resource type: Article
Subjects: Participation; Youth; Income;Research; Outcomes; Skills and knowledge; Employment; Workforce development; Teaching and learning show more
- The cost of specialized human capital
Gary Becker, in his pioneering work 'Human capital', explains that the cost of education is the sum of direct cost plus net foregone earnings - the difference between what could have been earned without attending school and what is earned while in school. However, the author suggests that individuals invest in specialised and not generic human capital. For some individuals, the opportunity cost of a specialised education is what could have been earned after accumulating an alternative specialised education. The paper demonstrates that if some individuals belong to a non-competing group, then direct schooling cost plus net foregone earnings will tend to understate the cost of education for others. The notion of a non-competing group requires that some may not be able to enter certain occupations. The human capital approach considers supply of and demand for human capital by individuals, rather than the supply of and demand for individuals with specialised human capital.
Gary Becker, in his pioneering work 'Human capital', explains that the cost of education is the sum of direct cost plus net ... Show Full Abstract
- A meta-analysis of the effect of education on social capital
To assess the empirical estimates of the effect of education on social trust and social participation - the basic dimensions of individual social capital - a meta-analysis is applied, synthesizing 154 evaluations on social trust, and 286 evaluations on social participation. The publication bias problem is given special emphasis in the meta-analysis. Our statistical synthesis confirms that education is a strong and robust correlate of individual social capital. The meta-analysis provides support for the existence of a relative effect of education on social participation, and of a reciprocity mechanism between the dimensions of social capital. The analysis also suggests that the erosion of social participation during the past decades has coincided with a decrease of the marginal return to education on social capital. Finally, we find differences in the return to education between genders, between the US and other nations, and variations for different education attainments.
To assess the empirical estimates of the effect of education on social trust and social participation - the basic dimensions ... Show Full Abstract
- International education quality
Education is linked with economic productivity and growth in personal income. But what is it about education which creates this linkage? Have nations with high rates of enrollment achieved the maximum educational productivity? This note will argue that the impact of education is derived primarily from its quality, but that there are multiple indicators of educational quality which do not necessarily operate in uniform fashion. The note will describe the distribution of educational quality around the world and point out that even in nations with full enrollment and high educational expenditure the impact of investments varies considerably. The note will review what we know about educational quality from the evidence of the last two decades. It will address some of the current debates surrounding investment in educational quality and it will introduce several issues which will drive these debates in the future.
Education is linked with economic productivity and growth in personal income. But what is it about education which creates ... Show Full Abstract
- Immigrant overeducation: evidence from recent arrivals to Australia
Australian immigration policy, in common with the US and Canada, has increased the emphasis on skill-based selection criteria. A key premise of this policy is that skilled immigrants are more employable and can add to the productive capacity of the economy. However, this effect will be diminished if immigrants are working in occupations that fail to utilise their skills. We examine the extent of overeducation for recently arrived immigrants to Australia. We find that they are more likely to be overeducated than the native population, even if they enter on skill assessed visas. Overeducation is greater for immigrants from non-English speaking backgrounds (NESB) and generates lower returns to education. Tighter restrictions to welfare support on entry raised employment levels but increased overeducation. This will serve to reduce the potential productivity gains from skill biased immigration policies.
Australian immigration policy, in common with the US and Canada, has increased the emphasis on skill-based selection ... Show Full Abstract
- Unequal education, poverty and low growth: a theoretical framework for rural education of China
This paper constructs an intertemporal substitution educational model based on endogenous growth theory and examines the rural education, farmer income and rural economic growth problems in China. It shows that the households originally with the same economic endowment but different education endowment take different growth routes, the income difference between low- and high-income families can be enlarged as they take different educational growth routes, and the low-income family has the chance to get into the 'poverty trap'. In the mean time, urban and rural, developed and underdeveloped rural areas, as they take the different education growth routes the difference of economic growth tend to be expanded for the flow of high-quality labor and different industrialization, and they also have the risk of 'poverty trap'. The key to solve this problem is the active public policies that promote the equal education, rational income and equilibrium development.
This paper constructs an intertemporal substitution educational model based on endogenous growth theory and examines the ... Show Full Abstract
Authors: Wu, Fangwei; Zhang, Deyuan; Zhang, Jinghua
Geographic subjects: Asia; China
Journal title: Economics of education review
Resource type: Article
Subjects: Finance; Equity; Skills and knowledge;Statistics; Disadvantaged; Governance; Employment; Economics; Demographics; Teaching and learning show more
- What level of education matters most for growth?: evidence from Portugal
We decompose annual average years of schooling series for Portugal into different schooling levels series. By estimating a number of vector autoregressions, we provide measures of aggregate and disaggregate economic growth impacts of different education levels. Increasing education at all levels except tertiary have a positive and significant effect on growth. Investment in education does not significantly crowd out physical investment and average years of schooling semi-elasticities have comparable magnitude across primary and secondary levels.
We decompose annual average years of schooling series for Portugal into different schooling levels series. By estimating a ... Show Full Abstract
- Non-market effects of education on crime: evidence from Italian regions
This paper studies the non-market effects of education on crime using a panel dataset for the 20 Italian regions over the period 1980-1995. Our empirical results suggest that education reduces crime over and above its effect through labour market opportunities (employment rate and wage rate). Because of the absence of a credible instrumental variable for education for Italy, our empirical strategy is to include in our econometric specification region fixed effect, year fixed effects and region-specific time trends together with an extensive set of socioeconomic and deterrence variables. Our results are robust to model specification, changes in the typology of crimes and finally, to alternative definitions of education.
This paper studies the non-market effects of education on crime using a panel dataset for the 20 Italian regions over the ... Show Full Abstract
- Education and job match: the relatedness of college major and work
The match between a worker's education and job has received much attention in the literature. Studies have focused on the match between years of schooling and the schooling required for the job, but the quantity of schooling is only one way to consider the match between schooling and jobs. This paper considers the relationship between college majors and occupations. Data from the National Survey of College Graduates are used to examine the extent to which workers report that their work activities unrelated to the college major. What degree fields lead to greater mismatch is explored as well as the effect on the returns to schooling.
The match between a worker's education and job has received much attention in the literature. Studies have focused on the ... Show Full Abstract
- Minimum wages and school enrollment of teenagers: a look at the 1990s
In this article, the authors estimate the effects of higher minimum wages on school enrolment in the US. They estimate the associations between minimum wages and high school continuation ratios over time and across states using the Common Core of Data. This data is collected by the US Department of Education and covers the whole population of public school students in the US whereas most other studies on the minimum wage are based on samples of the population. This study also investigates whether stricter dropout age laws reduce the impact of the minimum wage. The estimation reveals evidence that increasing the minimum wage lowers continuation ratios for grades 9-10 in states with dropout ages under 18. This evidence suggests that such policies may have the negative consequence of redirecting some young people from continuing with their schooling.
In this article, the authors estimate the effects of higher minimum wages on school enrolment in the US. They estimate the ... Show Full Abstract