recenttopicsineconeduandpersecon_2011

7/25/2019 recenttopicsineconeduandpersecon_2011

1/28

Recent Topics in Economics of Educationand Personnel EconomicsIntroductory meeting

Prof. Dr. Stefan C. WolterDr. Samuel Mhlemann


2/28

18/10/2011

Recent Topics in Economics of Education and Personnel Economics - Introductory meeting

2

Requirements

> The seminar participants are expected to be Master students.

>

Successful completion of the course Einfhrung in dieBildungskonomie (Prof. Wolter) or Economics ofPersonnel and Training (Dr. Mhlemann) required for

Bachelor students.>

Each student will prepare a term paper of approximately 15pages (in English or German)

> Power point or slide presentationof 15 minutes (in English)

> Discussionof the presentation of another participant(5 minutes)

>

If more than one participant is interested in one paper, thenthe paper will be allocated at random.

>

The paper which has to be discussed will be allocated after

the decision on the paper topics is made.


3/28

Grades

> Participants are expected to attend at all presentationsessions and to take part in discussions.

> Successful participation in the seminar results in a gradedcertificate worth 6 ECTS.

>

The grade depends on!

quality of the term paper (70%)

presentation, including discussing another paper, andparticipation in discussions (30%).

18/10/2011


3


4/28

Seminar paper

> Approximately 15pages

> 3 main parts:

a) Description, analysis and critique of the paper(60% of the length of the paper)

b) Paper in the light of other literature (30%)

c) Relevance and applicability to Swiss context (10%)

18/10/2011


4


5/28

List of Papers

Seven topics in economics of education and personneleconomics:

> Compulsory schooling (3)

>

Upper secondary level (3)> Tertiary education (2)

> Returns to education (3)

> Hiring (4)

>

Training (3)> Performance measurement and incentives (4)

18/10/2011


5


6/28

Compulsory schooling

> Joshua D. Angrist & Victor Lavy, 1999. "Using Maimonides'Rule To Estimate The Effect Of Class Size On ScholasticAchievement," The Quarterly Journal of Economics, MITPress, vol. 114(2), pages 533-575.

>

Question: Class size and pupils performance

> Problem: Class size is not always exogenous

>

Method: Regression-discontinuity design using theMaimonides rule of maximum class size

> Results: Class size reduces student performance but not inall grades

18/10/2011


6


7/2818/10/2011


7


8/28


> Bnabou, Roland & Kramarz, Francis & Prost, Corinne,2009."The French Zones D'Education Prioritaire: MuchAdo About Nothing?,"Economics of Education Review 28,pages 345356.

>

Question: Pupils in problem regions need more educationalresources to perform similarly to students in other regions

> Problem: How can we measure the impact of additionalresources if only students with potentially poor results get the

extra resources> Method: Instrumental variable approach

> Results: Additional resources had no impact at all

18/10/2011


8


9/28


> Eric A. Hanushek & Ludger Wssmann, 2006."DoesEducational Tracking Affect Performance and Inequality?Differences- in-Differences Evidence Across Countries,"Economic Journal, vol. 116(510), pages C63-C76.

>

Question: Many school systems track pupils very early intoability based separated educational streams

> Problem: Equity issues if allocation to tracks is based onsocio-economic background or school quality is different

>

Method: Difference-in-difference method comparing countryresults prior (primary schooling) and after (secondaryschooling) tracking.

> Results: Early tracking increases educational inequality

18/10/2011


9


10/28

Upper secondary level

> Ofer Malamud & Cristian Pop-Eleches, 2010."VocationalTraining versus General Education: Evidence from anEconomy in Transition," Review of Economics andStatistics, Vol. 92, No. 1: 4360.

>

Question: Does vocational education lead to inferior labourmarket outcomes than general education.

> Problem: People going into vocational education are not thesame as the ones following general education (ability

selection)> Method: Econometric identification for causal analysis uses

the discontinuity before and after the introduction of a generaleducational reform in Romania (1973)

>

Results: Differences are mainly due to selection18/10/2011


10


11/28


> Krister Sund, 2009."Estimating peer effects in Swedishhigh school using school, teacher, and student fixedeffects," Economics of Education Review, 28 (3), 329-336.

> Question: What is the effect of peer achievement on student

performance.>

Problem: Selection problem if placement in school is non-random, unobserved teacher and student characteristics.

> Method: Panel data allow to control for unobservableteacher-specific components and well as selection effects

(data show variation in teacher and peers across subject)> Results: Peer effects are stronger for low-performing

students that benefit the most from having high-performingpeers in the class room. Peer effects depend positively on theheterogeneity in peer achievement.

18/10/2011


11


12/28


> Renna, Francesco, 2008."Teens' alcohol consumption andschooling," Economics of Education Review, 27 (1), 69-78

> Question: Does drinking have a negative effect on academic

performance (drop out, or GED instead of graduating highschool)?

> Problem: (Binge-)Drinking is endogenous, affected by

unobserved factors, such as time preferences, that also affectthe level of educational attainment.

>

Method: Ordered Probit/Two-stage probit (variation inMandated Legal Drinking Age is used as IV for drinking).

> Results: One additional episode of binge-drinking per monthreduces prob(graduating high school) by 8%-points.

18/10/2011


12


13/28

Tertiary education

> Cappellari, Lorenzo & Lucifora, Claudio, 2009."The BolognaProcess and College Enrolment Decisions," LabourEconomics 16, 638647.

> Question: What is the effect of the Bologna-reform on

educational attainment in Italy?> Problem: Selection-issues as ability of those enrolling after

the reform might differ from those enrolling before. Presenceof cohort and macroeconomic trends.

>

Method: Before-and-after Bologna-reform pooled surveydata (1998/2001).

> Results: Bologna-reform increased enrollment in tertiaryeducation in Italy by 15% (for similar individuals). Effect islargest for good students from less advantaged households.

They also find a small negative effect on university drop-out.18/10/2011


13


14/28

Tertiary education

> Christine Neill, 2009."Tuition fees and the demand foruniversity places," Economics of Education Review, 28 (5),pages 561-570.

>

Question: What is the effect of tuition fees on universityenrollment?

> Problem: Tuition fees are endogenous

>

Method: Use changes in political party in power to identifyexogenous changes in tuition fees.

> Results: 1000 $(CAN) increase in tuition fees reducesenrollment by 2.5 - 5 percentage points. Effect is smallest forchildren from most advantaged families. University enrollmentin Canada (2002) would be at least 24% rather than 19% if no

changes in tuition fees had been made.18/10/2011


14


15/28

Returns to education

> Moretti, Enrico, 2004."Estimating the social return tohigher education: evidence from longitudinal andrepeated cross-sectional data," Journal of Econometrics,vol. 121(1-2), pages 175-212.

>

Question: What is the social return to education?> Problem: Own wage is increased by working with other high-

educated colleagues, but this might be endogenous (otherfactors can affect this share as well as wages, e.g., location)

>

Method: (i) Fixed-effects (individuals/city) (ii) estimatedproductivity shocks (iii) IV (age/land-grant colleges)

> Results: A one percentage point increase in the share ofcollege graduates raises high school drop-outs wages by1.9%, high school graduates wages by 1.6% and college

graduates wages by 0.4% (beyond private return!).18/10/2011


15


16/28

Returns to Education

> Colm Harmon & Hessel Oosterbeek & Ian Walker, 2003."TheReturns to Education: Microeconomics," Journal ofEconomic Surveys, 17(2), pages 115-156.

>

Question: What are rates of return to education (and itsmicroeconomic foundations)?

> Problem: Schooling is endogenous.

>

Method: Meta-Analysis

>

Results: Rates of return to education average 6%internationally (OLS) but >9% (IV). Higher IV estimates mayreflect that identification depends on subgroups (schoolreforms often affect those putting the least value oneducation, which may have high time preferences)

18/10/2011


16


17/28

Returns to Education

> Hartog, Joop & Vijverberg, Wim P.M., 2007."Oncompensation for risk aversion and skewness affectionin wages," Labour Economics, Elsevier, vol. 14(6), pages938-956.

>

Question: Higher wage variation increases wage risk.Conform to theories of the economics of finance, higher riskshould be associated with higher wages. But what happens ifthe risk comes from a higher skewness of wages?

>

Method: Empirical and theoretical analyses> Results: For men, wages rise with occupational earnings

variance and decrease with skewness, for women only thenegative effect of skewness is significant

18/10/2011


17


18/28

Hiring

> James W. Albrecht & Jan C. van Ours, 2006. UsingEmployer Hiring Behavior to Test the EducationalSignaling Hypothesis, Scandinavian Journal of Economics,vol. 108(3), pages 361-372.

>

Question: How important is employee signaling in formal vs.informal recruitment channels?

> Method: Survey of Dutch firms, information on jobcharacteristics before hiring, on the hiring channel and the

firms success in filling vacancies.> Results: Firms using informal recruitment channels are more

likely to adjust the required signal (education level)downwards.

18/10/2011


18


19/28

Hiring

> Marc Blatter, Samuel Mhlemann & Samuel Schenker(2011). The Costs of Hiring Skilled Workers, EuropeanEconomic Review, doi: 10.1016/j.euroecorev.2011.08.001

>

Question: How high are hiring costs of skilled workers, whatis the structure of these costs and what are theirdeterminants?

> Problem: Infer hiring cost structure (marginal hiring costs)from observing average costs.

>

Method: OLS

> Results: Average hiring costs in Switzerland range between

10-17 weeks of wage payments. The structure of hiring costsis convex.

18/10/2011


19


20/28

Hiring

> Edward Lazear, 1995. Hiring Risky Workers, NBERWorking Paper No. 5334.

> Question: Should a firm hire risky workers?

>

Problem: Productivity of the worker is unknown ex-ante.> Method: Theoretical analysis.

> Results: There must be a firm-specific component to risk,such that it is worthwhile for a firm to hire a risky worker (the

initial firm must have some advantage over other firms so thatthe worker can be retained if he turns out to be good, e.g.,mobility costs). Pay for risky workers is higher than for safeworkers (option value). General variance in ability provides nooption value.

18/10/2011


20


21/28

Hiring

> Michael Siegenthaler, 2011.Can a standardized aptitudetest predict training success of apprentices? Evidencefrom a case study in Switzerland,Empirical Research inVocational Education and Trainingvol. 3(2), forthcoming.

>

Question: How well can a standardized aptitude test predictthe behavior of trainees (grades, drop-out probability)?

> Method: Uses data on test scores and individual success inapprenticeship from a large retailer in Switzerland.

>

Results: Standardized aptitude tests do not providesignificantly more information than school grades.

18/10/2011


21


22/28

Training

> David H. Autor, 2001."Why Do Temporary Help FirmsProvide Free General Skills Training?," The QuarterlyJournal of Economics, vol. 116(4), pages 1409-1448.

>

Question: Why are temporary help firms willing to pay forgeneral skills (computer training)?

> Problem: Asymmetric information about ability of job

applicants ex-ante.

> Method: Theoretical and empirical analysis (IV/ Fixedeffects).

> Results: Firms are willing to pay for training to induce self-

selection of workers (of high ability), as workers can signalhigh productivity through training, and are willing to initiallyaccept lower wages after training.

18/10/2011


22


23/28

Training

> Edward P. Lazear (2009). Firm-Specific Human Capital: ASkill-Weights Approach, Journal of Political Economy, vol.117(5), pages 914-94

>

Question: Why do firms pay for general training?>

Problem:Economic theory suggests that firms never pay forgeneral human capital if labor markets are competitive butin practice firms are willing to pay for general skills.

> Method: Theoretical analysis of optimal skill mix, where eachskill is general.

> Results: All skills are general, but the mix of several general

skills can be firm-specific, if labor markets are thin, therebygiving firms incentives to pay for general training.

18/10/2011


23


24/28

Training

> Stefan C. Wolter & Samuel Mhlemann & Jrg Schweri,2006."Why Some Firms Train Apprentices and ManyOthers Do Not," German Economic Review, vol. 7, pages249-264.

>

Question: If training apprentices is profitable for trainingcompanies, why do not all firms train?

> Problem: How can we calculate the training cost of a non-training firm?

>

Method: Econometric identification with a selection model

> Results: Non training firms are not training because training

would not be profitable for them

18/10/2011


24


25/28

Performance measurement andincentives

> Oriana Bandiera, Iwan Barankay & Imran Rasul, 2007.Incentives for Managers and Inequality Among Workers:Evidence from a Firm-Level Experiment, Quarterly Journalof Economics, vol. 122(2), pages 729-773.

>

Question: What is the effect of performance pay formanagers on the productivity of lower-tier workers (fruitpickers)?

> Problem: Counterfactual is typically not observable.

>

Method: Firm-level experiment. Managers received fixed payin one period, and performance bonus (based on averageworker productivity) in the second period.

> Results: Performance pay for managers increases both themean and the variance of worker productivity.

18/10/2011


25


26/28


> Victor Lavy, 2002."Evaluating the Effect of TeachersGroup Performance Incentives on Pupils Achievements,Journal of Political Economy, 1286-1317 .

>

Question: Can we improve students performance withfinancial incentives for teachers or giving schools just moreresources?

> Problem: Identification issues as schools were not allocatedrandomly to the programs

>

Method: Econometric identification for causal analysis>

Results: Additional resources and financial incentives forteachers each have a causal effect; but financial incentivesseem to be more cost-effective

18/10/2011


26


27/28


> Edward P. Lazear, 2000. Performance Pay andProductivity,American Economic Reviewvol. 90(5), pages1346-1361

>

Question: Does performance pay increase workerproductivity?

> Problem: Performance pay is more appealing to more

productive workers.

> Method: Comparison of productivity before and after

introduction of performance pay.>

Results: Productivity increase after the introduction ofperformance pay is partly due to a change in the compositionof the workforce, and partly due to increased worker effort.

18/10/2011


27

R T i i E i f Ed i d P l E i I d i


28/28


> Bruce Shearer, 2004. Piece Rates, Fixed Wages andIncentives: Evidence from a Field Experiment, TheReview of Economic Studies, vol. 71(2), pages 513-53.

>

Question: Does piece rate pay increase productivity of treeplanters in British Columbia?

> Problem: Introduction of piece rate pay induces self-selection

of workforce (more able workers find performance pay moreattractive)

>

Method: Experiment, performance pay randomly allocated totreatment group, control group receives fixed pay.

> Results: Performance pay increases productivity by 20%.

18/10/2011


28

Date post:	25-Feb-2018
Category:	Documents
Upload:	samirnet
View:	216 times
Download:	0 times

recenttopicsineconeduandpersecon_2011

Documents