Rising health spending, new medical technology and the Baumol effect

This paper estimates the Baumol effect in health spending, using a panel data set of OECD countries. Health expenditure as a share of GDP rises in most OECD countries. One of the possible causes is the so-called Baumol effect, which may arise if labour productivity in health care grows more slowly than in the overall economy. If in addition demand for health care is inelastic, then the share of health spending in GDP will rise over time. We do indeed find that one percentage growth in economy-wide labour productivity is associated with about 0.5 percent growth in real health spending. This implies that economy-wide productivity growth leads to higher real health spending.

The Crime Reducing Effect of Education

In this paper, we present evidence on empirical connections between crime and education, using various data sources from Britain. A robust finding is that criminal activity is negatively associated with higher levels of education. However, it is essential to ensure that the direction of causation flows from education to crime. Therefore, we identify the effect of education on participation in criminal activity using changes in compulsory school leaving age laws over time to account for the endogeneity of education. In this causal approach, for property crimes, the negative crime-education relationship remains strong and significant. The implications of these findings are unambiguous and clear. They show that improving education can yield significant social benefits and can be a key policy tool in the drive to reduce crime.Crime, education, offenders

From High School to the High Chair::Education and Fertility Timing

We exploit an expansion of post-compulsory schooling that occurred from the late 1980s to the early 1990s to investigate the effect of education on the timing of fertility in England and Wales. We do not find a significant effect on the probability of having a child as a teenager but instead find that the variation in education led to delays in childbearing. Our estimates suggest that an increase in education by one year led to a 5.3% increase in probability of first birth aged 24 or above, 9.4% increase in probability of first birth aged 27 or above, and 13.3% increase in probability of first birth aged 30 or above. The mechanisms driving these findings are not due to an incapacitation effect – by keeping young people in school or university they have less time or opportunity to have a child – but due to a combination of human capital and signalling effects.</p

From High School to the High Chair:Education and Fertility Timing

This paper examines the effect of education on the timing of fertility. First, we use an institutional rule that led to women obtaining qualifications due to their month of birth (Easter Leaving Rule). Second, we exploit a large expansion of post-compulsory schooling that occurred from the late 1980s to the early 1990s. This expansion resulted in the proportion of 18 year olds in full time education rising from around 17% in 1985 to over 35% in the late 1990s. We find that neither the exogenous increase in qualifications as a result of the Easter Leaving Rule nor the expansion in post-compulsory schooling led to a reduction in the probability of having a child as a teenager. However, we do find that both sources of variation in education led to delays in having a child. There is no evidence that the mechanism driving these findings are due to an incapacitation effect. Instead the results point to both a direct human capital effect and an improvement in labour market opportunities as a result of holding qualifications

From High School to the High Chair::Education and Fertility Timing

We exploit an expansion of post-compulsory schooling that occurred from the late 1980s to the early 1990s to investigate the effect of education on the timing of fertility in England and Wales. We do not find a significant effect on the probability of having a child as a teenager but instead find that the variation in education led to delays in childbearing. Our estimates suggest that an increase in education by one year led to a 5.3% increase in probability of first birth aged 24 or above, 9.4% increase in probability of first birth aged 27 or above, and 13.3% increase in probability of first birth aged 30 or above. The mechanisms driving these findings are not due to an incapacitation effect – by keeping young people in school or university they have less time or opportunity to have a child – but due to a combination of human capital and signalling effects.</p

The effects of competition on the quality of primary schools in the Netherlands

Do schools facing more competition in their neighbourhood perform better than schools facing less competition? As a measure of school quality, we look at the performance of pupils at the nationwide standard test (the so-called Cito test) in the final year of primary education. Since competition is likely to be endogenous to the quality of schools, we use the distance between the school and the town centre as an instrument for the level of competition faced by a school. The intuition is that schools located close to the town centre, which are easily accessible to a large number of parents, face more competition than schools located further away from the town centre. Using a large range of data on pupil, school and market characteristics, we find that school competition has a small positive significant effect on pupil achievement. An increase in competition by one standard deviation (comparable to 5 additional schools in the market) increases pupil achievement at the Cito test by five to ten percent of the mean standard deviation, so about less than one point. This result is robust to a large range of specifications.

The effect of childhood conduct disorder on human capital

This paper estimates the longer-term effects of childhood conduct disorder on human capital accumulation and violent and criminal behaviour later in life using data of Australian twins. We measure conduct disorder with a rich set of indicators based on diagnostic criteria from psychiatry (e.g., aggression to people and animals, destruction of property, deceitfulness or theft, and/or serious violations of rules). Using ordinary least squares (OLS) and twin fixed effects (FE) estimation approaches, we find that early (pre-18) conduct disorder problems significantly affect both human capital accumulation and violent and criminal behaviour over the life course. For instance, within pairs of identical twins we find that conduct disorder reduces the probability of high school graduation with 4 to 13 percent points and increases the probability of being arrested with 7 to 16 percent points. Robustness checks suggest that these estimates may be lower bounds of the true effects of conduct disorder. In addition, we find that conduct disorder is more deleterious if these behaviours occur earlier in life. We conclude that childhood mental health problems have high human and financial costs for families and society at large. Effective treatments early in life might yield high returns.

Why are criminals less educated than non-criminals? Evidence from a cohort of young Australian twins

This paper investigates the question whether crime reduces investment in human capital or whether education reduces criminal activity by using fixed effect estimation on data of Australian twins. The study takes genetic and socio-economic factors shared by the twins into account.�We find that early arrests (before the age of 18) have a strong effect on human capital accumulation. In addition, we find that education decreases crime. However, controlling for early arrests and early behaviour problems reduces the estimated effect of human capital on crime to less than on third of the previously estimated association. From this, we conclude that the strong association between human capital and crime is mainly driven by the effect of early criminal behaviour on educational attainment. The strong detrimental effects of early criminal behaviour become also transparent if we consider the estimated effects of early arrests on three measures of crime. We also find large effects of early criminal behaviour on participation in crime later on. This suggests that programs that succeed in preventing early criminal behaviour might yield high social and private returns.

From High School to the High Chair:Education and Fertility Timing

This paper examines the effect of education on the timing of fertility. First, we use an institutional rule that led to women obtaining qualifications due to their month of birth (Easter Leaving Rule). Second, we exploit a large expansion of post-compulsory schooling that occurred from the late 1980s to the early 1990s. This expansion resulted in the proportion of 18 year olds in full time education rising from around 17% in 1985 to over 35% in the late 1990s. We find that neither the exogenous increase in qualifications as a result of the Easter Leaving Rule nor the expansion in post-compulsory schooling led to a reduction in the probability of having a child as a teenager. However, we do find that both sources of variation in education led to delays in having a child. There is no evidence that the mechanism driving these findings are due to an incapacitation effect. Instead the results point to both a direct human capital effect and an improvement in labour market opportunities as a result of holding qualifications