The trend reversal in income inequality and returns to education: How bad is this good news for Latin America?
Augusto de la Torre, Julián Messina, 7 March 2013
The last decade has seen unprecedented economic and social achievements in Latin America. This column investigates the relationship between changes in the labour market and the drop in income inequality across the continent. There is certainly room for more research to help us better understand Latin America’s spectacular decline in income inequality, but what is clear is that the good news is tempered by the fact that the specialisation of the region’s economies are relatively low in skill intensity and therefore productivity.
Latin America witnessed unprecedented economic and social achievements during the last decade. In particular, the year 2003 appears as an important inflexion point for the region’s economic history, a point that we have highlighted in several World Bank publications1.
Topics: Labour markets
Tags: education, income inequality, Latin America
The long-run gains of not mixing genders in high-school classes
Massimo Anelli, Giovanni Peri, 23 February 2013
What causes fewer women than men to choose high-earning potential subjects such as engineering, economics or science at undergraduate level? This column presents new evidence from an accidental natural experiment in Italy, suggesting mixed-gender classes at the high-school level reduce the number of women pursuing these subjects. These results suggest that gender-separated classrooms are an effective way to increase women’s career opportunities and salaries.
Gender gap in college majors and earnings
Topics: Education, Gender, Labour markets
Tags: education, gender, Italy, labour, wages, women
The reduction of school days in Japan increased educational inequality
Daiji Kawaguchi, 2 February 2013
Japan switched to five-day weeks for its primary and junior high schools and saw an increase in educational inequality. This column discusses new evidence suggesting a loose tie between number of days at school and inequality. Importantly, this tie reflects the fact that homes with university-educated parents tend to offset the official reduction in hours with additional tuition.
One of the major objectives of compulsory education is to assure uniform educational opportunities for all children regardless of their socioeconomic background. For that reason, most advanced countries provide compulsory education as well as textbooks free of charge.
Tags: education, Japan, university
Simon Commander, Alexander Plekhanov, 29 January 2013
Russia aims to diversify its economy and reduce its dependence on natural resources. Despite laudable aims, this column argues that progress has been sluggish. Longstanding obstacles of corruption, low business-entry rates and weak competition afflict other countries that, like Russia, are in transition. Yet Russia comes pretty much bottom of the class. Crucially, the fact that economic diversification requires improvements to education and skills acquisition has been somewhat overlooked by the state. What attempts the state has made, such as supporting technology innovation, appear to have been ineffectual and, at times, counterproductive. Going forward, Russia would do well to focus on improving incentives for market-relevant research and development, complemented by private sector-led sources of finance for early-stage firms.
Russia aims to diversify its economy, thereby moving away from its dependence on oil and gas. Despite much political rhetoric, our research (European Bank for Reconstruction and Development 2012) indicates that, to date, relatively little has been achieved. Oil and gas still account for nearly 70% of total merchandise exports and around a half of the federal budget.
Tags: economic diversification, education, gas, oil, Russia, skills
The expansion and convergence of compulsory schooling: Lessons for developing countries
Fabrice Murtin, Martina Viarengo , 18 January 2013
A workforce’s cognitive skills and ability to learn are regarded as crucial factors for countries hoping to develop and become competitive in the global knowledge economy. This column argues that many developing countries‘ basic educational attainment and learning outcomes remain wanting. Taking a look at Europe’s historical record can shed light on the developing-country context, and evidence suggests that simply expanding an ill-functioning educational system will be wasteful. It’s advisable for policymakers to pursue institutional reform aimed at cost-efficiency before they begin implementing school reforms.
One goal of the UN’s Millennium Declaration is “achieving universal primary education” by 2015 (UN 2012). Yet, according to recent statistics, 61 million children of primary school age are not enrolled in school (UNESCO 2012), and 12% do not complete primary education (World Bank 2012).
Topics: Development, Labour markets
Tags: education, learning outcomes, school leaving age, schooling
The impact of immigration on the educational attainment of natives
Jennifer Hunt, 17 November 2012
Are poorly-educated immigrants’ kids dragging native classmates down? Or do schoolchildren push themselves when new, smarter immigrants join their class? This column argues that although child immigrants may sometimes bring down native minorities, on the whole, poorly educated natives upgrade their education in response to new immigrants in the classroom.
The increase in wage inequality in a large number of developed countries has heightened the importance of ensuring all children complete at least an apprenticeship or 12 years of high school.
Tags: education, immigration
Who lives longer?
Josep Pijoan-Mas, Víctor Ríos-Rull, 30 September 2012
What explains differences in life expectancy at age 50? This column looks at the effect of wealth, education, and marital status. It finds that by far the most important factor is education, and explores what this might mean for policy.
Economists have long been worried about income inequality and its effects on welfare. For instance, workers with a college degree earn on average much more than those who did not complete high school. This disparity translates into large differences in consumption levels and hence welfare (see, for instance, Heathcote et al. 2010).
Topics: Education, Health economics, Poverty and income inequality
Tags: education, health, life expectancy, wealth
Games on Networks
Matthew O. Jackson, Yves Zenou, 9 September 2012
This paper provides an overview and synthesis of the literatures analysing games where players are connected via a network structure. While it focuses on the game theoretic modeling, it also also include some discussion of analyses of peer effects, as well as applications to diffusion, employment, crime, industrial organisation, and education.
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Topics: Frontiers of economic research, Industrial organisation
Tags: crime, education, unemployment
Reflections on the curious contrast of public policies between Germany and the US: Real estate versus human capital
Joshua Aizenman, Ilan Noy, 25 August 2012
In the years leading up to the global crisis, the US focused on subsidising home ownership, whereas Germany placed much more emphasis on education and vocational training. While it is easy to think that this explains the subsequent performance of the two economies, this column provides some much needed economic analysis.
During the years leading to the global crisis, the US and Germany were the dominant growth poles in the Americas and Europe, respectively (ADD CITE). Their position reflected their growth performance and their dominant size.
Topics: Education, Global crisis, Macroeconomic policy
Tags: education, Germany, global crisis, housing, subprime crisis, US