Balancing the risk of ‘Lazearian’ interrupters and the benefits of educational and social peers: tracing parental preferences for class-size reduction

Using Danish survey data from a choice experiment, parental preferences for class-size reduction are estimated. While parents with children in large classes are willing to pay for class-size reduction, parents with children in small classes are reluctant and even express negative utility for further class-size reduction. We interpret this as parents balancing the risk of ‘Lazearian’ interrupters and the benefits of educational and social peers when forming their preferences for class size.     

The links between openness and productivity in Mediterranean countries

We examine the relation between the international trade, the foreign direct investment and the total factor productivity of the Mediterranean partner countries of Europe within the framework of a cointegrated panel model. The results, obtained from data on seven Mediterranean partner countries of Europe (Algeria, Egypt, Israel, Jordan, Morocco, Tunisia, Turkey), show that FDI and human capital are complementary in the acquisition of productivity gains. We identify the threshold level of human capital from which the received foreign investments generate beneficial effects. In a more general way, the improvement of the total factor productivity via the international openness results only from the indirect effects related to the transfer of technology.     

Families,schools and primary-school learning: evidence for Argentina and Colombia in an international perspective

This article presents evidence on the associations between family background, school characteristics and student performance in primary school in Argentina, Colombia and several comparison countries. As a general pattern, educational performance is strongly related to family background, weakly to some institutional school features and hardly to schools’ resource endowments. In an international perspective, family-background effects are relatively large in Argentina, and relatively small in Colombia. A specific Argentine feature is the lack of performance differences between rural and urban areas. A specific Colombian feature is the lack of significant between-gender performance differences. Nonnative students and students not speaking Spanish at home perform particularly weak in both countries. In Argentina, students perform better in schools with a centralized curriculum and ability-based class formation.     

Easy grading practices and supply–demand factors: evidence from Italy

In this article, we investigate how heterogeneity in grading standards across university degree courses is related to supply and demand factors. Using a sample of almost 26,000 students enrolled at an Italian University, we document how grades vary significantly across degrees. After controlling for student characteristics, class-size, classmate quality and degree fixed effects, it emerges that students obtain better grades and are less likely to drop-out when their degree course experiences an excess of supply. We adopt an instrumental variable strategy to account for endogeneity problems and instrument the excess of supply using the total number of universities offering each degree course. Our two-stage least squares (TSLS) estimates confirm that the teaching staff on degree courses facing low demand tend to set lower academic standards with the result that their students obtain better grades and have a lower probability of dropping out than they might otherwise. Similar results are obtained using a control function approach.     

Formal institutions and subjective well-being: Revisiting the cross-country evidence

A long tradition in economics explores the association between the quality of formal institutions and economic performance. The literature on the relationship between such institutions and happiness is, however, rather limited, and inconclusive. In this paper, we revisit the findings from recent cross-country studies on the institution–happiness association. Our findings suggest that their conclusions are qualitatively rather insensitive to the specific measure of ‘happiness’ used, while the associations between formal institutions and subjective well-being differ among poor and rich countries. Separating different types of institutional quality, we find that in low-income countries the effects of economic–judicial institutions on happiness dominate those of political institutions, while analyses restricted to middle- and high-income countries show strong support for an additional beneficial effect of political institutions. Our results bear important implications that we discuss in the concluding section of the paper.     

Evaluating the magnitude and the stakes of peer effects analysing science and math achievement across OECD

What follows is an exercise aimed at estimating peer effects' impact on science and math test scores of secondary school students surveyed in 1995 by the International Education Agency across OECD countries. It is also to discuss their importance for educational policy, particularly regarding the highly sensitive issue of ability-grouping. Using this unique international database. This study assesses the magnitude of the peer effect relative to more traditional inputs. Referring to education policy stakes, we control for the presence of increasing or decreasing return. This study also checks for cross effects in order to determine whether peer effects matter more to low or high SES pupils, and whether their final impact on achievement is affected by the underlying level of heterogeneity within the group. Using a methodology, which a priori accounts for the clustering of the data within countries and schools/classrooms - i.e. fixed/random effect or hierarchical model - our analysis indicates that peer effects are strong determinants of both math and science achievement relative to individual SES and other school inputs. The presence of increasing of decreasing returns is not obvious. But we find systematic evidence that low-ability pupils are more sensitive to peer group characteristics. By contrast, this study also find that - for a given level of the peer effect - higher heterogeneity comes at a certain cost. In brief, these results provide no systematic evidence regarding grouping policies.     

Does international openness affect the productivity of local firms?

This paper examines how international openness can change firm productivity in south‐eastern Europe (SEE), a crucial question for middle‐income countries. Using firm‐level data for six transition economies over the 1995–2002 period, we identify whether foreign ownership and propensity to trade with more advanced countries can bring about higher learning effects. We find that: (i) foreign ownership has helped restructure and enhance the productivity of local firms in four out of six countries; (ii) exporting to advanced markets has a larger impact on productivity growth in four countries, especially when the firm's absorptive capacity is taken into account; (iii) in contrast, exporting to the less competitive markets of the former Yugoslavia seems to negatively affect productivity growth in three countries; and (iv) learning effects from importing are similar to those from exporting. Our results suggest that trade liberalization is not uniformly beneficial. Regional composition of trade flows and absorptive capacity of local firms matter. Thus, trade liberalization within the SEE region may not provide a substitute for a general trade liberalization which includes access to the more competitive markets of countries belonging to the Organization for Economic Co‐operation and Development.     

Which school systems sort weaker students into smaller classes? International evidence

We examine whether the sorting of high- and low-achieving students into classes of different sizes results in a regressive or compensatory pattern of class sizes for 18 national school systems. Sorting effects are identified by subtracting the causal effect of class size on performance from their total correlation. Our empirical results reveal strongly compensatory patterns of sorting within and especially between schools in many countries. Only the United States, which has a decentralized education finance and considerable residential mobility, exhibits regressive between-school sorting. Between-school sorting is more compensatory in systems with ability tracking. Within-school sorting is more compensatory where administrators rather than teachers assign students to classrooms.     

Are free trade agreements good for the environment? A panel data analysis

This study empirically examines the relationship between free trade agreements (FTAs) and greenhouse gas (GHG) emissions. For this purpose, we use three different FTAs: the Southern Common Market, the North American Free Trade Agreement, and the Australia–United States Free Trade Agreement. These FTAs are between developing, both developing and developed, and only developed countries, respectively. Panel unit root, panel cointegration, and fully modified ordinary least squares estimations are employed to examine the long‐run relationship between GHG emissions and trade liberalization. The results indicate that the environmental effects of FTAs depend on the different agreement types. When FTAs are between only developed or developing countries, overall there is no environmental damage, and these types of FTAs can be beneficial for the environmental quality in the long run. However, when developing and developed countries are in a trade agreement, overall environmental quality decreases due to increased GHG emissions.     

Structural reforms and growth in transition

The present fiscal difficulties of many countries amplify the call for structural reforms. To provide stylized facts on how reforms worked in the past, we quantitatively review 60 studies estimating the relationship between reforms and growth. These studies examine structural reforms carried out in 26 transition countries around the world. Our results show that an average reform caused substantial costs in the short run, but had strong positive effects on long‐run growth. Reforms focused on external liberalization proved to be more beneficial than others in both the short and long run. The findings hold even after correction for publication bias and misspecifications present in some primary studies.     

Impact of Immigrant Peers on Native Students’ Achievement: Evidence from Australia,Canada and the United States

This article examines how exposure to immigrant students affects the achievement of native students in Australia, Canada and the United States. Variation in the share of immigrant students across different grade levels within schools is exploited to identify the impact of immigrant peers. The study finds that the effects on native students’ achievements of exposure to immigrant peers differ between the three countries. While exposure has a positive impact on Australian natives, it has a negative impact on Canadian natives. Exposure has no effect on US natives. How immigrant students affect their peers is found to depend on institutional arrangements within the education system.     

Neoclassical versus evolutionary economics in developing countries: convergence of policy implications

This paper aims to determine whether the dichotomy between the science, technology, and innovation policy based on neoclassical and evolutionary schools of economics is applicable to developing countries. Regarding the fundamental differences in foundations of these two economic paradigms, policymakers have been forced to select and to follow one of the two seemingly competing views. However, in developing countries, due to various market and government coordination failures, complying with one of the schools has not been successful in practice. From the past, there has been some controversy between neoclassical and evolutionary schools on the subject of science, technology and innovation policy. Using a survey questionnaire and statistical analyses of the results, this paper shows that, due to the institutional setting and structural conditions in developing countries, despite the fundamentally different foundations of the competing schools of thought, the policy implications of the schools have converged. Drawing on Theme Analysis Method, the rationales are first conceptualized and then the fuzzy method is applied to reveal the respondents’ tendency to the extracted rationales and implications of the two competing schools. In conclusion, the statistical results validate the proposed hypothesis.     

发展中国家的资本账户开放:问题和抉择

无论是对发达国家还是发展中国家资本账户的开放性研究,人们都倾注了大量的精力.但是回顾这争鸣的百家,对发展中国家资本账户开放后的经济效应,也莫衷一是.尽管如此,被经济学界广泛承认的事实是,资本账户开放后的效应是因各国情况不同而不同的,需要决策者审时度势,慎之又慎,尤其要避免伴随资本账户开放而可能带来的金融冲击甚至危机.     

Borders and Growth

This paper presents a framework to understand and measure the effects of political borders on economic growth and per capita income levels. In our model, political integration between two countries results in a positive country size effect and a negative effect through reduced openness vis-à-vis the rest of the world. Additional effects stem from possible changes in other growth determinants, besides country size and openness, when countries are merged. We estimate the growth effects that would have resulted from the hypothetical removal of national borders between pairs of adjacent countries under various scenarios. We identify country pairs where political integration would have been mutually beneficial. We find that full political integration would have slightly reduced an average country's growth rate, while most countries would benefit from a more limited form of merger, involving higher economic integration with their neighbors.     

On Nations’ Size and Transportation Costs*

This paper develops a noncooperative Nash model in which a closed border is opened to trade between countries that differ in size and transportation costs. the paper suggests an explanation as to why economists have not convinced policymakers to lift all barriers to free trade. the questions we pose are: Who will gain as a result of opening the borders? Is free trade beneficial to the two parties involved? Do they both share equally in the fruits of free trade? Which country, large or small, benefits most? It is shown that free trade is not beneficial to both countries.     

Stuck in the middle: Impacts of grade configuration in public schools

We examine the implications of separating students of different grade levels across schools for the purposes of educational production. Specifically, we find that moving students from elementary to middle school in 6th or 7th grade causes significant drops in academic achievement. These effects are large (about 0.15 standard deviations), present for both math and English, and persist through grade 8, the last year for which we have achievement data. The effects are similar for boys and girls, but stronger for students with low levels of initial achievement. We instrument for middle school attendance using the grade range of the school students attended in grade 3, and employ specifications that control for student fixed effects. This leaves only one potential source of bias–correlation between grade range of a student's grade 3 school and unobservable characteristics that cause decreases in achievement precisely when students are due to switch schools–which we view as highly unlikely. We find little evidence that placing public school students into middle schools during adolescence is cost-effective.     

Private or public school advantage? Evidence from 40 countries using PISA 2012-Mathematics

It is known that in most countries, private school students outperform students in public schools in international assessments. However, the empirical literature recognizes that assessing the true effect of private school attendance requires addressing selection and sorting issues on both observabland unobservables. The existing empirical evidence on the private school effect mostly covers OECD and Latin American countries, with little evidence on other parts of the world. There is recent emerging country-specific evidence doubting the existence of a private school advantage. I use PISA 2012 data for Mathematics and two different methodologies to derive baseline and bias-corrected estimates of the private-dependent and independent school effect for 40 countries. A robust private school advantage is found only in a handful of countries. Public schools generally perform as well as private subsidized schools and outperform independent schools. Accounting for both peer effects and selection is necessary when evaluating school effectiveness, especially in the case of independent schools.     

Technology spillover effects within Spanish communities

The article uses panel data for the period 1990–2010 to estimate technology spillover effects on 17 Spanish communities. Accounting for nonstationarity and cointegration, we use the dynamic OLS estimator to estimate the impact of domestic and non-domestic R&;D capital stock on labour productivity of Spanish communities, taking into account trade-, migration- and foreign direct investment (FDI)-related technology diffusion channels. We find significant trade-related spillover effects within Spanish communities and from EU countries. On average, an increase in the non-domestic R&;D stock of 1% increases their labour productivity between 0.02% and 0.12% if related to bilateral trade pattern. Moreover, migration within Spanish communities has a negative impact ranging between ?0.07% and ?0.16% on labour productivity as the impact of inward migration is dominated by outward migration. There is no robust impact from FDI inflows of OECD countries in general or EU countries in particular. Finally, the domestic R&;D stock, physical capital and human capital are shown to be significant drivers for labour productivity in Spain no matter if non-domestic (local or foreign) spillover effects are trade-, migration- or FDI-related.     

Corruption in space: A closer look at the world's subnations

Corruption levels differ not only between but also within countries. In this paper we analyze spatial interdependencies in corruption levels for a large sample of 1232 subnational regions from 81 countries. Based on a spatial autoregressive model, which controls for country-fixed effects and corrects for spatial autocorrelation in the error term, we find that a subnational region's corruption level is positively correlated with neighboring subnational regions' corruption levels. Extending the core model and allowing for heterogeneous spatial effects, we find that most spillovers among subnational regions occur within national borders. Moreover, in particular high income subnational regions and subnational regions with relative low corruption levels tend to spill in space. This is due to their high degree of connectivity in terms of economic, sociocultural and political exchange with other subnational regions. Our estimation results underline the importance to consider not only a subnational region's own characteristics, but also spatial interdependencies when implementing efficient anti-corruption policies at the local level.     

Make Trade Not War?

This paper analyses theoretically and empirically the relationship between military conflicts and trade. We show that the conventional wisdom that trade promotes peace is only partially true even in a model where trade is economically beneficial, military conflicts reduce trade, and leaders are rational. When war can occur because of the presence of asymmetric information, the probability of escalation is lower for countries that trade more bilaterally because of the opportunity cost associated with the loss of trade gains. However, countries more open to global trade have a higher probability of war because multilateral trade openness decreases bilateral dependence to any given country and the cost of a bilateral conflict. We test our predictions on a large data set of military conflicts on the 1950–2000 period. Using different strategies to solve the endogeneity issues, including instrumental variables, we find robust evidence for the contrasting effects of bilateral and multilateral trade openness. For proximate countries, we find that trade has had a surprisingly large effect on their probability of military conflict.