Economic Returns to Education: What We Know, What We Don't Know, and Where We Are Going – Some Brief Pointers

The estimation of the economic return to education has perhaps been one of the predominant areas of analysis in applied economics for over 50 years. In this short note we consider some of the recent directions taken by the literature, and also some of the blockages faced by both science and policymakers in pushing forward some key issues. This serves by way of introduction to a set of papers for a special issue of the Economics of Education Review.education policy, returns to education

Education Policy Reform and the Return to Schooling from Instrumental Variabes

We exploit an unusual policy reform which had the effect of reducing the direct cost of schooling in Ireland in the early 1970's. This gave rise to an increased level of schooling but with effects that vary across family background. This interaction generates a set of instrumental variables which we use to estimate the return to schooling allowing for the endogeneity of schooling. We find a large and well determined in the rate of return of the order of 11 or 12% substantially higher than the OLS estimates of around 7%.

Psychological and Biological Foundations of Time Preference: Evidence from a Day Reconstruction Study with Biological Tracking

This paper considers the relationship between the economic concept of time preference and relevant concepts from psychology and biology. Using novel data from a time diary study conducted in Ireland that combined detailed psychometric testing with medical testing and real-time bio-tracking, we examine the distribution of a number of psychometric measures linked to the economic concept of time preferences and test the extent to which these measures form coherent clusters and the degree to which these clusters are related to underlying biological substrates. The paper finds that financial discounting is related to a range of psychological variables including consideration of future consequences, self-control, conscientiousness, extraversion, and experiential avoidance as well as being predicted by heart rate variability and blood pressure.time preferences, day reconstruction study, economics and psychology, economics and biology

Experimental Tests of Survey Responses to Expenditure Questions

This paper tests for a number of survey effects in the elicitation of expenditure items. In particular we examine the extent to which individuals use features of the expenditure question to construct their answers. We test whether respondents interpret question wording as researchers intend and examine the extent to which prompts, clarifications and seemingly arbitrary features of survey design influence expenditure reports. We find that over one quarter of respondents have difficulty distinguishing between "you" and “your household” when making expenditure reports; that respondents report higher pro-rata expenditure when asked to give responses on a weekly as opposed to monthly or annual time scale; that respondents give higher estimates when using a scale with a higher mid-point; and that respondents report higher aggregated expenditure when categories are presented in a disaggregated form. In summary, expenditure reports are constructed using convenient rules of thumb and available information, which will depend on the characteristics of the respondent, the expenditure domain and features of the survey question. It is crucial to further account for these features in ongoing surveys.expenditure surveys, survey design, data experiments

Micro-Level Determinants of Lecture Attendance and Additional Study-Hours

This paper uses novel measures of individual differences that produce new insights about student inputs into the (higher) education production function. The inputs examined are lecture attendance and additional study-hours. The data were collected through a web-survey that the authors designed. The analysis includes novel measures of individual differences including willingness to take risks, consideration of future consequences and non-cognitive ability traits. Besides age, gender and year of study, the main determinants of lecture attendance and additional study-hours are attitude to risk, future-orientation and conscientiousness. In addition, future-orientation, and in particular conscientiousness, determine lecture attendance to a greater extent than they determine additional study. Finally, we show that family income and financial transfers (from both parents and the state) do not determine any educational input. This study suggests that non-cognitive abilities may be more important than financial constraints in the determination of inputs related to educational production functions.higher education, education inputs, lecture attendance, hours of study, future-orientation, attitude to risk, non-cognitive ability, conscientiousness

Parental Education, Grade Attainment and Earnings Expectations among University Students

While there is an extensive literature on intergenerational transmission of economic outcomes (education, health and income for example), many of the pathways through which these outcomes are transmitted are not as well understood. We address this deficit by analysing the relationship between socio-economic status and child outcomes in university, based on a rich and unique dataset of university students. While large socio-economic differences in academic performance exist at the point of entry into university, these differences are substantially narrowed during the period of study. Importantly, the differences across socio-economic backgrounds in university grade attainment for female students is explained by intermediating variables such as personality, risk attitudes and time preferences, and subject/college choices. However, for male students, we explain less than half of the socio-economic gradient through these same pathways. Despite the weakening socio-economic effect in grade attainment, a key finding is that large socio-economic differentials in the earnings expectations of university students persist, even when controlling for grades in addition to our rich set of controls. Our findings pose a sizable challenge for policy in this area as they suggest that equalising educational outcomes may not translate into equal labour market outcomes.inequality, education, socio-economic status, discrimination

Functional Literacy, Educational Attainment and Earnings - A Multi-Country Comparison

In this paper a rich and innovative dataset, the International Adult Literacy Survey, is used to examine the impact of functional literacy on earnings. We show that the estimated return to formal education is sensitive to the inclusion of literacy - excluding it biases the return to education in many countries by significant amounts. Literacy itself has a well-determined effect on earnings in all countries though with considerable variation in the size of the effect. The benefits of literacy do not only arise from increasing low levels of literacy: increases at already high levels generate substantial increases in earnings in some countries. In general we find little interaction between schooling and literacy though for a few countries they appear to complement each other.

Design of a monitor and simulation terminal (master) for space station telerobotics and telescience

Based on Space Station and planetary spacecraft communication time delays and bandwidth limitations, it will be necessary to develop an intelligent, general purpose ground monitor terminal capable of sophisticated data display and control of on-orbit facilities and remote spacecraft. The basic elements that make up a Monitor and Simulation Terminal (MASTER) include computer overlay video, data compression, forward simulation, mission resource optimization and high level robotic control. Hardware and software elements of a MASTER are being assembled for testbed use. Applications of Neural Networks (NNs) to some key functions of a MASTER are also discussed. These functions are overlay graphics adjustment, object correlation and kinematic-dynamic characterization of the manipulator

Disentangling Individual and Community Effects on Environmentally Sensitive Behaviors

A major criticism of the environmental behavior literature is the nearly exclusive focus on the role of attitudes and individual-level characteristics. Despite this concentration on individual-level causes, variation in environmental behavior remains. As individual behavior becomes an increasingly significant source of pollution, a better understanding of the influences individual behavior is critical to addressing environmental degradation. This research re-directs the focus on individual-level influences on environmental behaviors by building models examining the varying dimensions of environmental behaviors as influenced by community characteristics. This is accomplished by testing a series of hypotheses under the auspices of two theoretical frameworks: the neoclassical economic theory and a social contextual model of environmental actions. Using individual-level data from the 1993 and 2000 General Social Survey and MSA data from the U.S. Census and the Environmental Protection Agency, I estimate two-level hierarchical models for three environmentally sensitive behaviors (environmentally sensitive food consumption, environmentally sensitive automobile use, and environmental activism). Multi-level analyses yield models revealing significant associations between MSA measures and individual environmental behaviors. Objective environmental conditions, region of MSA and MSA education level are significantly associated with environmentally sensitive food consumption behaviors, environmentally sensitive automobile use, and environmental activism behaviors, though their influence assumes diverse forms. Among the community measures, MSA education level is the primary social process that produces change in all environmental behaviors. In each of the models, MSA education level exhibits effects on all three behavioral measures and significant cross-level effects on automobile use behaviors. Living in a well educated MSA, particularly in the West or Northeast suggests higher environmental participation. Region of MSA is also a characteristic that must be considered when evaluating environmental behaviors, particularly for those living in the West and Northeast. Theoretical conclusions suggest that individual environmental behavior decision making is not simply a market exchange, but social forces are at work in the individual decision-making process