Returns to university education; evidence from an institutional reform

In 1982, duration of university education in the Netherlands decreased from five to four years. This institutional reform is exploited for estimating the causal effect of one year of university education on wages in 1997. Wages of employees who enrolled just before or after the reform are compared using data from the Dutch Wage Structure Survey of 1997. We find that the fifth year of university education increased wages with 7 to 9 percent. This wage differential is found for employees enrolling four years before or after the reform. Confounding factors like time-effects, typical age-effects or ability-bias do not seem to bias the main results. The findings suggest that there is scope for increasing private contributions of students. Moreover, the reform may have harmed total welfare. Alternative policies of sticking to five-year duration and increasing private contributions for higher education could have given a more favourable outcome.

Assessing the returns to studying abroad

The market for higher education increasingly becomes an international market. Nowadays, the number of students studying abroad is substantial and increasing. Many governments stimulate students to study abroad by offering a wide range of grants. However, little is known on the returns to studying abroad. This paper explores the feasibility of a new approach for finding credible evidence on the returns to studying abroad. We use a sample of graduates who applied for a specific grant for studying abroad and compare the outcomes of graduates who received the grant with the outcomes of graduates who did not receive the grant. The ranking of the applicants by the selection committee has been used to create credible control groups. We find that the grant has increased the probability of studying abroad with 23 to 42%-points and the duration of the study with 7 to 9 months. An extension of the study with 7 to 9 months increases the probability of living abroad with 30 to 39%-points. Studying abroad is associated with higher wages. However, it is not clear whether these higher wages are caused by studying abroad.

Raising teacher supply: An assessment of three options for increasing wages

A shortage of teachers in primary and secondary schools in the Netherlands is expected in the near future as a large part of the current workforce will retire. Recently, the Dutch government has decided to increase wages of teachers. This paper qualitatively assesses the impact of three options for increasing teaching wages on teacher supply in the medium term: increasing wages at the start of the career, increasing wages at mid career or increasing wages at the end of the career.

The effect of education on smoking behaviour: New evidence from smoking durations of a sample of twins

We analyse the causal effect of education on starting and quitting smoking, using longitudinal data of Australian twins. We take into account the endogeneity of education, censoring of smoking durations and the timing of starting smoking versus that of completing education by using the flexible Mixed Proportional Hazard (MPH) specification. Unobserved effects in the specification are assumed to be twin specific and possibly correlated with completed education years. In addition, we use various unique control indicators reflecting the discounting behaviour of individuals that may affect both the smoking decision and the number of education years. In contrast to previous studies in our model specification, differences in the number of education years cannot explain differences in smoking behaviour at young ages. We find one additional year of education to reduce the duration of smoking with 9 months, but no significant effect of education on starting smoking. The effect of education on quitting smoking largely confines to male twins. This suggests that education policies that succeed in raising the level of education may improve public health through an increase of smoking cessation, but are not effective in preventing smoking at young ages.

Does education reduce the probability of being overweight?

This paper analyses the causal effect of education on the probability of being overweight by using longitudinal data of Australian identical twins. The data include self-reported and clinical measures of body size. The prevalence of overweight and obesity is growing rapidly in many countries. Education policies might be important for reducing this increase. Our cross-sectional estimates confirm the well-known negative association between education and the probability of being overweight. For men we find that education also reduces the probability of being overweight within pairs of identical twins. The estimated effect of education on overweight status increases with age. Remarkably, for women we find no negative effect of education on body size when fixed family effects are taken into account. Identical twin sisters that differ in educational attainment do not systematically differ in body size. This finding is robust to differences in employment and number of children.

Sexual Orientation, Prejudice and Segregation

This paper examines whether gay and lesbian workers sort into tolerant occupations. With information on sexual orientation, prejudice and occupational choice taken from Australian Twin Registers, we find that gays and lesbians shy away from prejudiced occupations. We show that our segregation results are largely driven by those gay and lesbian workers with disclosed identities, and robust to the inclusion of unobserved factors that are inherited and observed factors that strongly correlate with productive skills and vocational preferences. Our segregation estimates are generally large and consistent with prejudice based theories of employer and employee discrimination against gay and lesbian workers.sexual orientation, occupational choice, discrimination, segregation

Do school inspections improve primary school performance?

Inspectors from the Dutch Inspectorate of Education inspect primary schools, write inspection reports on each inspected school, and make recommendations as to how each school can improve. We test whether these inspections result in better school performance. Using a fixed-effects model, we find evidence that school inspections do lead to measurably better school performance. Our assessment of school performance is based on the Cito test scores of pupils in their final year of primary school. Therefore school improvement means increased Cito test scores. The results indicate that the Cito test scores improve by 2% to 3% of a standard deviation of the test score in the two years following an inspection. The arithmetic component shows the largest improvement. Our estimates are the result of an analysis of two types of school inspections performed between 1999 and 2002, where one type was more intensive than the other. In one fixed-effects model, we assume that the effect of the two types of school inspections was the same. We cannot, however, be sure that the estimates from this model are free from the problem of endogeneity bias. Therefore, we also obtain estimates for a less restrictive fixed-effects model. In this less restrictive model, we make use of the fact that a subset of the more intensive school inspections occurs at a representative selection of primary schools. Based on this smaller, essentially randomly drawn sample of schools, we can be confident that these estimates of the effect of school inspections are free from endogeneity bias. Due to the limited number of inspections at randomly selected schools, these estimates are not significantly different from zero. These estimates are, however, consistent with the effects found based on all inspections. The less restrictive model also allows for the effect of the more intensive inspections to differ from that for the less intensive ones. We find evidence that the more intensive inspections are responsible for larger increases in the Cito test scores than the less intensive ones.

Successful knowledge policies

Knowledge policy is widely considered to be an important subject. The Dutch government conducts intensive policy on the foundations of the knowledge economy: education, research and innovation. In the literature and in policy circles, proposals for additional knowledge policies or reforms of existing policies are currently being discussed. Examples are the Knowledge Investment Agenda of the Innovation Platform, new innovation policies of the Ministry of Economic Affairs, an advice of the Council of Economic Advisors about research, education and entrepreneurship and an advice of the Education Council. Little is known, however, about the effects of all these policies. The question whether knowledge policy works remains difficult to answer. Despite much research effort in the past decades, the manner in which the creation and application of knowledge comes about and the way policy can influence that process are still not well understood. It is difficult, therefore, to form a good judgement about the optimal size and form of knowledge policy. This article discusses several policy options in the fields of education, research, and innovation that are likely to have beneficial, neutral, or negative effects on overall welfare in the Netherlands. For some options, the effects are unknown. Beneficial education policies are, for instance, policies aimed at increasing teachers' quality and early childhood education programs. Additional R&D tax credits for new firms have favourable effects on innovation. A further increase in the research incentives to universities is expected to raise scientific output.

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.

The Effect of Education on Smoking Behavior: New Evidence from Smoking Durations of a Sample of Twins

This paper analyses the effect of education on starting and quitting smoking, using longitudinal data of Australian twins. The endogeneity of education, censoring of smoking durations and the timing of starting smoking versus that of completion of education are taken into account by the flexible Mixed Proportional Hazard specification. Unobserved effects are assumed to be twin specific and possibly correlated with completed education years. We find that one additional year of education reduces the duration of smoking with 9 months but has no effect on the decision to start smoking.education, duration models, smoking