Government Versus Non‐Government Schools: A Nation‐Wide Assessment Using Australian Naplan Data

There are considerable differences in school outcomes on the NAPLAN tests in Australia between Government and non‐Government schools. This paper documents these for four years of study (Years 3, 5, 7 and 9), and for the five NAPLAN domains (Grammar and Punctuation, Numeracy, Reading, Spelling and Writing). It then examines the extent to which the differences are due to characteristics of the schools, such as the socioeconomic status of the school and the gender mix of the total enrolment at the school. It is shown that a greater share of the difference in marks between Government and non‐Government schools in Year 9 than in Year 3 is due to the characteristics of the schools. This implies that, consistent with recent press coverage, the better outcomes of the non‐Government schools are due, in part at least, to a selection process that favours academically advantaged students.     

Viewpoint: Measuring and understanding subjective well‐being

Abstract Increasing attention is being paid in academic, policy, and public arenas to subjective measures of well‐being. This promising trend represents a shift towards measuring positive outcomes in psychology and greater realism in the study of economic behaviour. We describe the main measures of subjective well‐being (SWB) and provide examples of policy‐relevant research findings, including new accountings of the differences in individual‐level SWB assessments around the world and across Canada. These suggest a consistent pattern of life circumstances linked to SWB and highlight the importance of social factors whose role has otherwise been hard to quantify in income‐equivalent terms.     

Sorting and inequality in Canadian schools

A student's peers are often thought to influence his or her educational outcomes. If so, an unequal distribution of advantaged and disadvantaged students across schools (“sorting”) in a community will amplify existing inequalities. This paper explores the relationship between the degree of sorting across schools within a community and educational inequality as measured by the variance of standardized high school exam scores within the community. Cross-sectional OLS estimates suggest that the variance of test scores is related to sorting by ethnicity, but not to sorting by income or parental education. We then implement two strategies for addressing endogeneity in the degree of sorting: a standard unobserved effects (first-difference) approach, and a first-difference/instrumental variables approach in which the structure of school choice (number and relative size of schools) is used to construct instruments for the degree of sorting. The results from both approaches indicate that the variance of test scores is related to sorting by home language and parental education, but not to sorting by income. Our results also suggest that reducing sorting would have little effect on inequality of outcomes in the typical Alberta community, but would have substantial effects in the larger cities.     

An index number framework for explaining changes in input productivity– an application to energy efficiency

Lott (2009) finds that nonvoted ballot rates for down-ballot races are greater than those for presidential races, and newer technologies that reduce nonvoted presidential ballots create even greater rates of nonvoting down-ballot than the same older voting technologies. The conclusion is momentous: adopting voting technologies that minimize under-voting in presidential races actually increases under-voting across all races on the same ballot. This study extends Lott's by examining the Congressional vote on the Help America Vote Act of 2002 (HAVA 2002), which established a program to provide funds to states in order to replace punch card voting systems with newer technologies. We focus on the racial component of Lott's finding, specifically that Hispanic-American voters exhibit greater rates of voter fatigue than do white voters. This study posits that, given the large Hispanic-American populations in California and Texas and their propensity to support Democrats in these states, House Democrats from these states would not view the HAVA 2002 as favourably as House Democrats from other parts of the US. Among other results presented here, the data show that support for HAVA 2002 among California and Texas House Democrats was 11.6 percentage points below that of House Democrats from the other 48 states.     

Racial diversity and academic test scores in public elementary schools

This article examines the effect of racial diversity on academic achievement using panel data on San Francisco’s public elementary schools from 2003 to 2007. Theories argue that the relationship between racial diversity and academic achievement may be positive or negative. Few studies have examined the effect of racial diversity in US elementary schools. Fixed effects models are used to examine the relationship between racial diversity and academic performance in elementary schools. Controls for student differences and teaching staff differences are added as part of the education production function literature. Results show that racial diversity has little effect on academic achievement scores.     

Heterogeneous effects of merit scholarships: do program features matter?

This paper examines the role of program features in determining the effectiveness of merit scholarships on educational outcomes using data from the 2009 to 2014 American Community Survey. Exploiting the variation in the timing of program adoption as well as program features across states, I find that leniency of academic requirements for initial eligibility largely contributes to program effects on associate’s degree completion, whereas generosity of scholarship amount significantly increases college attendance and bachelor’s degree completion. The estimates also indicate that lower requirements for scholarship renewal appear to positively affect the likelihood of completing a degree in science, technology, engineering, and mathematics fields (STEM). The findings suggest that leniency and generosity are important determinants of program effectiveness on educational outcomes. It is thus relevant to take program features into account when designing merit scholarships.     

Low‐inflation Targeting and Long‐run Unemployment*

The model of Akerlof, Dickens and Perry (2000) (ADP) predicts that low inflation may cause unemployment to persist at high levels. When applied to U.S. data, their results strongly rejected the conventional NAIRU model. We apply the ADP model to Swedish data. The fact that our Swedish data also reject the NAIRU model has a number of interesting implications for the Swedish economy and, potentially, for other European countries as well. The results indicate that raising the Swedish inflation target from 2 to 4 percent would bring long‐run unemployment down by several percentage points. The possibility of ADP‐type long‐run Phillips curves also across the euro countries may raise some concern about the EMU project. While detailed studies on other countries are needed, there is nothing to suggest that these non‐vertical Phillips curves would not differ considerably across the euro countries. Any single inflation level targeted by the ECB would then generate excess unemployment in individual member states.     

Positional income concerns and personality: evidence from Germany

Positional income concerns (PIC) strongly influence economic behaviour and life outcomes. However, very little is known about the underlying heterogeneity regarding their importance across individuals on the one hand and across different reference groups on the other. Our analysis builds on representative survey data reporting PIC vis-à-vis seven reference groups, allowing us to identify marked heterogeneity both between and within subjects. We present evidence about who (in terms of personality) compares to whom (in terms of reference group).     

STATE INCOME TAXES AND MILITARY SERVICE MEMBERS' LEGAL RESIDENCY CHOICES

Using military residency data from 1998 to 2005 across all 50 states, I find that income taxes deter legal residencies and that the effect grows as income increases. My results indicate that states with no income tax or with exemptions for military wages experience 100% and 39% more service member residencies, respectively, than states with an income tax. The influence of state tax policy increases with higher pay and tenure. My findings are in keeping with economic theory, which suggests that high income workers will migrate out of high tax areas and be replaced by low income workers. (JEL H24, H71, J61)     

A Laboratory Investigation of Multiperson Rationality and Presentation Effects

This paper reports the results of laboratory experiments in which subjects were presented with different two-person decision problems in both their extensive and normal forms. All games generated the same equilibrium outcomes. Our results indicate that the presentation of the decision problem significantly affects the strategy chosen. Surprisingly, these presentation effects were most prominent in the simplest games where differences in presentation would seem most transparent. It appears that subjects are much more likely to use (and fear) incredible threats when the problem is presented as a one-stage rather than as a multistage game. Journal of Economic Literature Classification Numbers: 026,215.     

Can information and counseling help students from poor rural areas go to high school? Evidence from China

Recent studies have shown that only about two-thirds of the students from poor, rural areas in China finish junior high school and enter high school. One factor that may be behind the low rates of high school attendance is that students may be misinformed about the returns to schooling or lack career planning skills. We therefore conduct a cluster-randomized controlled trial (RCT) using a sample of 131 junior high schools and more than 12,000 students to test the effects of providing information on returns or career planning skills on student dropout, academic achievement and plans to go to high school. Contrary to previous studies, we find that information does not have significant effects on student outcomes. Unlike information, counseling does have an effect. However, the effect is somewhat surprising. Our findings suggest that counseling increases dropouts and seems to lower academic achievement. In our analysis of the causal chain, we conclude that financial constraints and the poor quality of education in junior high schools in poor, rural areas (the venue of the study) may be contributing to the absence of positive impacts on student outcomes from information and counseling. The negative effects of counseling on dropout may also be due to the high and growing wages for unskilled labor (high opportunity costs) in China’s transitioning economy. It is possible that when our counseling curriculum informed the students about the reality of how difficult were the requirements for entering academic high school, it may have induced them to revise their benefit-cost calculations and come to the realization that they are better off dropping out and/or working less hard in school.     

Improving Public High Schools: Evidence from New York

This study examined why differing public high schools have widely varying levels of student success. Two outcomes, namely the dropout and the college attendance rates, were analyzed using data for suburban schools just outside of New York City. While the dropout and college attendance rates proved most sensitive to community economic differences, they also responded to the way high schools were managed. Schools with smaller classes and less crime employing more experienced and qualified teachers enjoyed better outcomes. Teacher pay, however, was not a significant factor determining student success.      

To each according to their ability? Academic ranking and salary inequality across public colleges and universities

This article compares the salary structure of tenured and tenure-track faculty across schools within the university systems of North Carolina and New York. Specifically, we establish a positive relationship between school prestige and salary inequality, both overall and within specific academic ranks. This result suggests that the value to teaching is less discipline-specific than the value to research output. Marked differences in the aforementioned statistical linkage across academic ranks also confirm prior speculation that junior faculty salaries are more closely tied to academic value than senior faculty salaries.     

THE ECONOMICS OF INTRODUCING WINE INTO GROCERY STORES

The repeal of the Prohibition Act in 1933 introduced many state‐specific regulations in wine markets. For example, 15 states currently have laws that restrict wine sales in grocery stores. Several of these states have proposed changes that would expand the distribution of wine; however, the proposals have met significant resistance from key stakeholders and none have resulted in legislation. It is widely expected that additional proposals will be initiated, but with more attention given to mechanisms that would address some of the transitional issues. A simulation model is developed here to assess the likely economic effects of introducing wine into grocery stores in New York State. Results indicate that tax revenue would increase by $22 million annually, revenue for in‐state wineries would increase by approximately 13%, and revenue for liquor store owners is calculated to fall by 28%. Simulation results are subsequently used to develop a framework for evaluating the transitional costs of policy reform in this highly regulated industry. (JEL K23, Q18)     

Fiscal Policy in Real Time*

In this paper, I estimate the ex ante or intentional cyclical stance of fiscal policy in OECD countries. I use the fiscal plans reported at the time of budgeting, together with other information available to fiscal policy‐makers in real time. Indeed, fiscal plans might be significantly different from ex post outcomes because governments do not have complete control over their implementation, which is influenced by several exogenous factors. When fiscal‐policy rules are estimated using real‐time data, I show in this paper that OECD countries have often planned a counter‐cyclical fiscal stance, especially during economic expansions. This contrasts with conventional findings based on actual data, which tend to point towards a‐cyclicality or pro‐cyclicality. Forecast errors for the government structural balance and the output gap play a central role in explaining the differences between estimates based on ex ante and ex post data.     

HIGH SCHOOLS AND STUDENTS' INITIAL COLLEGES AND MAJORS

We use statewide administrative data from Missouri to examine the explanatory power of high schools over student sorting to colleges and majors at 4‐year public universities. We develop a “preparation and persistence index” (PPI) for each university‐by‐major cell in the Missouri system that captures dimensions of selectivity and rigor and allows for a detailed investigation of sorting. Our analysis shows that students' high schools predict the quality of the initial university, as measured by PPI, conditional on their own academic preparation, and that students from lower–socioeconomic status high schools systematically enroll at lower‐PPI universities. However, high schools offer little explanatory power over major placements within universities. (JEL I2, J1)     

Regional economic growth disparities: A political economy perspective

Regional differences in economic growth have been observed within many countries. Our story emphasises three region-specific factors driving growth—capital, labour and political factors. Conditional on differences in production factor (i.e., labour and capital) variations across democratic states, what role do differences in underlying “political factors” across regions play in accounting for regional growth disparities? We build a political economy model of endogenous growth where regions have the same political institutions, but experience different (and estimable) distributions over voter political biases (i.e., our “political factors”). In our model, political factors affect regional productivity as a consequence of politico-economic equilibrium. We discipline our regional growth accounting exercises by calibrating/estimating each model to American state-level economic and political-survey data. We show that the capital factor is the predominant driving force behind growth in American states. Nevertheless, regional variations in distributions of voter's political biases also account a great deal for regional growth disparities. We also evaluate how much politics would have distorted agents' welfare and regional growth, were regional economies given the opportunity to live under an efficient social planner's allocation system; and, if agents were to live under the same democratic system but where all voters have equal voting influence.     

TIME‐VARYING EFFECTS OF HUMAN CAPITAL ON MILITARY RETENTION

This paper examines how human capital acquired at the onset of a military career has an evolving effect on retention decisions. Using data of Marine officers that extends across 20‐year horizons, estimates of the hazard related to separation rates indicate that initial differences in general and firm‐specific human capital have time‐varying effects on retention across the duration of a career. Additional evidence suggests that the effects of higher economy‐wide unemployment as well as the onset of wars succeeding from September 2001 also change retention decisions and depend on officers' length of service. (JEL J6, J41, J45)     

The quandaries of social entrepreneurship studies – a discursive review of the discipline

The aim of this paper is to investigate the ways in which social entrepreneurship knowledge is both propelled and hindered by the socioeconomic circumstances. We examine the existing body of research and identify different conceptualizations and main schools of thought. We then demonstrate how the process of constructing academic representation is shaped by the prevalent public discourses. Our analysis leads to the differentiation between social entrepreneurship as mitigation and social entrepreneurship as transformation. We conclude that a better alignment of the two approaches – broadening research focus from outcome to process – would reveal their complementarity and contribute to the conceptual advancement of the discipline. We propose expanding the existing approaches with the politics of social entrepreneurship studies and stress the importance of increased reflexivity on the plight of the new discipline.     

Cognitive function, numeracy and retirement saving trajectories

This paper examines the extent to which cognitive abilities relate to differences in trajectories for key economic outcomes as individuals move towards and through their retirement. We look at whether differences in baseline numeracy (measured in the English Longitudinal Study of Ageing in 2002) and broader cognitive ability predict the subsequent trajectories of outcomes such as wealth, retirement income and key dimensions of retirement expectations. Those with lower numeracy are shown to have different wealth trajectories both pre- and post-retirement than their more numerate counterparts, but the distributions of retirement expectations and net replacement rates are similar across numeracy groups.