Economics of Education

NBER Reporter, Summer 2004 | Go to article overview
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Economics of Education


The NBER's Program on the Economics of Education met in Cambridge on April 1. Program Director Caroline M. Hoxby of Harvard University organized this agenda:

Jorn-Steffen Pischke, NBER and London School of Economics, and Alan Manning, London School of Economics, "Ability Tracking and Student Performance in Secondary Schools in England and Wales"

Heather Rose, Public Policy Institute Of California (PPIC), and Jon Sonstelie, University of California, Santa Barbara, "School Board Politics, School District Size, and the Bargaining Power of Teachers' Unions"

Randall K. Filer, Hunter College, and Daniel Munich, CERGE-EI, Prague, "Responses of Private and Public Schools to Voucher Funding"

David J. Zimmerman, NBER and Williams College, "Institutional Ethos, Peers, and Individual Outcomes"

Steven Rivkin, NBER and Amherst College, and Christopher Jepsen, PPIC, "What is the Tradeoff between Smaller Classes and Teacher Quality?"

Sean P. Corcoran, California State University, Sacramento, and William N. Evans, NBER and University of Maryland, "Income Inequality, the Median Voter, and the Support for Public Education"

British secondary schools moved from a system of extensive selection and tracking to a system with comprehensive schools during the 1960s and 1970s. Before the reform, students would take an exam at age eleven which determined whether they would attend an academically-oriented grammar school or a lower-level secondary school. Manning and Pischke use differences in the timing of the reform at the local level to study the impact of the system students attended on their performance in school, educational attainment, and labor market success. The authors use data from the National Child Development Study, a cohort panel following individuals who entered secondary school in 1969, in the midst of the transition to comprehensive education. They show that areas which switched to a comprehensive system earlier tended to have poorer households and more poorly performing students, so the raw difference between early comprehensive areas and those remaining selective is not informative. In a more detailed examination, the results indicate that selective schools tend to perform at least as well, or better, overall--but there may be an advantage from attending comprehensive schools for certain children, particularly those with high ability but poor family background.

Rose and Sonstelie develop a public choice model of the bargaining power of teachers' unions. The model predicts that the power of the unions rises with the number of eligible voters in a district. As a bargaining outcome reflecting this power, the authors use the experience premium for teachers. The premium is defined as the difference in salary between experienced and inexperienced teachers. For a sample of 771 California school districts in 1999-2000, a district's premium is related positively to the number of voters. This finding is consistent with the model's prediction.

Filer and Munich point out that the post-communist Czech Republic provides a laboratory in which to investigate what would happen if a large American state were to adopt universal education vouchers. There, private schools appear to have arisen in response to distinct market incentives. They are more common in fields where public school inertia resulted in two few available slots. They are also more common where the public schools appear to be doing a worse job in their primary mission: obtaining admission to the top universities for their graduates.

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