GRADUATE EDUCATION AND PRIVATE RATES OF RETURN: A REVIEW OF THEORY AND EMPIRICISM

In this paper twelve recent studies regarding private rates of return for graduate education are reviewed and evaluated. Possible sources of error due to data base, methodology and interpretation of results are examined and compared. After this has been done, the authors calculate returns to graduate education with spatial distribution problems and job security incorporated in the model. The article concludes that the typical rate of return method has been pushed about as far as it can go and now is the time for the economic profession to develop more meaningful techniques which will allow us to come to grips with the policy issues regarding the level of support for education.     

SCHOOL QUALITY AND RETURNS TO EDUCATION OF U.S. IMMIGRANTS

Using the U.S. labor market as a common point of reference, this article investigates the influence of source country school quality on the returns to education of immigrants. Based on 1980 and 1990 census data, we first estimate country-of-origin specific returns to education. Results reveal that immigrants from Japan and northern Europe receive high returns and immigrants from Central America receive low returns. Next we examine the relationship between school quality measures and these returns. Holding per capita GDP and other factors constant, immigrants from countries with lower pupil-teacher ratios and greater expenditures per pupil earn higher returns to education.)     

CHANGING ROLES OF ABILITY AND EDUCATION IN U.S. INTERGENERATIONAL MOBILITY

Using data on young adults from the 1979 and 1997 National Longitudinal Survey of Youth, we investigate the changing roles of ability and education in the transmission of economic status across generations. We find that ability plays a substantially diminished role for the most recent cohort whereas education plays a much larger role. The first finding results primarily from a smaller effect of children's ability on status, the second from an increased correlation between parental status and educational attainment. A replication of the analysis by gender reveals that the changes in the role of ability are largely driven by men whereas the changes in education's role are largely driven by women. (JEL J62, I24)     

ASTRONOMICS IN ACTION: THE GRADUATE EARNINGS PREMIUM AND THE DRAGON EFFECT IN SINGAPORE

This paper investigates the return to university education in Singapore using a new estimation strategy related to Chinese traditions where children born in the Year of the Dragon are believed to be superior. Because parents might time the arrival of their offspring on a Dragon year, this causes the Dragon cohort to be larger and university entry to be more competitive. First, we find evidence of a negative “Dragon effect” on university educational attainment. Then, using it as an estimation strategy, we find that university education has a ceteris paribus effect of raising earnings by at least 50% on average. (JEL I21, C26, J30)     

GENDER AND THE HEALTH BENEFITS OF EDUCATION

Does education improve health more for one sex than the other? We develop a theory of resource substitution which implies that education improves health more for women than men. Data from a 1995 survey of U.S. adults with follow‐ups in 1998 and 2001 support the hypothesis. Physical impairment decreases more for women than for men as the level of education increases. The gender gap in impairment essentially disappears among people with a college degree. Latent growth SEM vectors also show that among the college educated, men's and women's life course patterns of physical impairment do not differ significantly.     

A HUMAN CAPITAL MODEL OF THE EFFECTS OF ABILITY AND FAMILY BACKGROUND ON OPTIMAL SCHOOLING LEVELS

This paper develops a theoretical model of optimal schooling levels where ability and family background are the central explanatory variables. We derive schooling demand and supply functions based on individual wealth maximization. Using the National Longitudinal Survey of Youth 1979 data, we stratify our sample into 1-yr full-time equivalent (FTE) work experience cohorts for 1985–1989. The estimated Mincerian "overtaking" cohort (the years of work experience at which individuals' observed earnings approximately equal what they would have been based on schooling and ability alone) corresponds to 13 FTE years of experience, yielding on average a rate of return of 10.3% and an average (optimal) 11.4 yr of schooling. ( JEL J24, J31, J22)     

INFLATION AND REAL STOCK RETURNS REVISITED

The article uses the (unbalanced) panel data to revisit the effects of expected inflation, unexpected inflation, and inflation uncertainty on real stock returns. The empirical results are obtained via the pooled mean group estimator, which can be applied to I (1) and/or I (0) variables, and can distinguish long- and short-run effects. Using a panel of 16 industrialized Organization for Economic Cooperation and Development countries over the 1957: Q 1 to 2000: Q 1 period, we find that anticipated inflation and inflation uncertainty tend to have insignificant short-run effects, while they appear to have negative long-run impacts on real stock returns. Moreover, we find coexistence of a negative long-run effect and a positive short-run effect of unanticipated inflation on real stock returns. These findings help clarify the conflicting conclusions of both empirical and theoretical studies on this issue. ( JEL C23, E31, G12)     

TEACHER UNIONS AND THE COST OF PUBLIC EDUCATION

Do teacher unions affect the cost of public education? Based upon data from two national surveys and holding measures of educational output and other factors constant, the authors of this paper find that teacher unions raise costs by 7 to 15 percent. The estimated differential is not reduced by treating unionization as endogenous, by distinguishing between large and small districts, or by distinguishing between districts in large and small cities. The union effect on cost works through teacher compensation, production technology, and factor use, and is borne primarily by taxpayers, with little or no effect on average student achievement.     

THE COMPETITIVE RETURNS TO THE GLOBAL SEARCH FOR TALENT: PROFESSIONAL SPORTS MARKETS AND FOREIGNERS

We examine the geographical and racial diversity of a market's labor supply. While the likely impact of expanding supply is to increase the level of productivity, it is not obvious what impact the expansion would have on the overall level of competition. If the added labor increases productivity differentials or are disproportionately populated on high achieving firms, then the likely result would be greater imbalance. We find that while increases in the foreign‐born component are associated with an increase in the overall level of competition, the impact has diminished across time. (JEL C22, D23, D30)     

THE NATIONAL COLLEGIATE ATHLETIC ASSOCIATION AND THE GOVERNANCE OF HIGHER EDUCATION

This research investigate the contradictory role of the National Collogiate Athletic Athletic Association (NCAA) as the linkng-pin organization within the economic and educational network of intercollegiate athletic organizations. The NCAA is posited as an institutional structure that developed from struggles over the legitimate definition and practice of intercollegiate athletics within the system of higher education in the U.S. It regulates athletic competition and the distribution of material resources in the network and strives to develop and maintain the legitimate purposes of athletic competition in the system of higher education. This study furthers research in the social organization of sport by combining economic and cultural explanations to reveal competing rationalities and the ebb and flow of domination in the institutional process.     

THE RATE OF RETURN TO MEXICAN AMERICANS AND ANGLOS ON AN INVESTMENT IN A COLLEGE EDUCATION

Rates of return to an investment in a college education are estimated for Mexican American and Anglo male college graduates with majors in business, accounting, education and liberal arts. The returns, estimated for 1967, 1970 and 1973 graduates of Pan American University, are quite substantial for all but the Anglo education majors. The returns to the business and accounting majors substantially exceed those to the other graduates. There was no strong tendency for the rates of return to fall over time nor were there any systematic differences between the returns to the two ethnic groups. This latter result does not imply an absence of labor market discrimination against Mexican American college graduates.     

THE DEMAND FOR HIGHER EDUCATION AND INSTITUTIONAL ENROLLMENT FORECASTING

This paper presents a university enrollment forecasting model and evaluates the model's performance in a case application. The model includes (1) enrollment demand equations with both tuition and labor market variables; (2) equations to forecast values of the labor market variables which influence demand; and (3) procedures to calculate the statistical confidence interval in an enrollment forecast .