Search

Earnings differentials between racial or ethnic groups exist in most societies. Economists have been interested in the source of these differences for a long time. Their main focus is on whether wage differences are the result of market failure (discriminatory behavior by employers, workers, and consumers) or of differences among race/ethnic groups in productive skills Historical data suggest that race/ethnic wage discrimination in the United States has declined since the 1940s, but still may exist for workers in jobs associated with lower levels of education. On skill differences, the analysis has turned to assessing whether these are mainly cognitive or noncognitive and whether they are formed early in childhood or result later, from differential access to schooling quality.

Thirty years of warnings have not been realized that American students’ low performance on international tests threatens U.S. economic growth . Average national scores on a single test in a single year are inaccurate guides to educational policy. They hide differences in the social class composition of national samples and differences in how disadvantaged and advantaged students in each country perform over time. Further, in a large country such as the United States, where states are in charge of educational systems, performance by students of similar social class background on international tests varies greatly among states. Our examination of international test results finds that U.S. relative performance would seem to be better if U.S. social class composition were similar to that of comparison nations; that U.S. performance on international tests that are aligned with the U.S. curriculum is superior to performance on unaligned tests; and that disadvantaged students in the U.S. have been making more rapid gains than disadvantaged students in nations with higher score levels. All this should make policy makers cautious in jumping to conclusions about the shortcomings of U.S. schools and how to improve them. ᅟ

A widely-held belief about the benefits of expanding access to education is that greater access extends social mobility and income equality. In the case of higher education, as enrollments expand, bright youth from lower-income families are more likely to enter and complete universities. In theory, this should increase the chances of such individuals to move upward economically, by making them more able to compete for higher-paying jobs associated with a higher degree. Further, with rapid increases in the number of higher education graduates, their relative earnings may fall, eventually making overall income distribution more equal.

Because higher education serves both public and private interests, the way it is conceived and financed is contested politically, appearing in different forms in different societies. What is public and private in education is a political–social construct, subject to various political forces, primarily interpreted through the prism of the state. Mediated through the state, this construct can change over time as the economic and social context of higher education changes. In this paper, we analyze through the state’s financing of higher education how it changes as a public/private good and the forces that impinge on states to influence such changes. To illustrate our arguments, we discuss trends in higher education financing in the BRIC countries—Brazil, Russia, India, and China. We show that in addition to increased privatization of higher education financing, BRIC states are increasingly differentiating the financing of elite and non-elite institutions.

This paper reviews the various elements that enter into the relation between higher education expansion and income distribution. Contrary to the prevailing ideology, the paper suggests that under certain conditions the mass expansion of higher education can contribute to greater income inequality. These conditions are related to three important variables not usually considered in the education-income distribution model: rising returns to university education relative to secondary and primary education, decreasing public spending differences between higher and lower levels of education, and increasing spending differences between elite and mass universities. All three appear to be increasingly common features of educational expansion in developing countries, including large ones such as China, Russia, Brazil, and India, although researchers are just beginning to observe such changing patterns of spending within higher education systems. The paper discusses the role that such payoffs and government education spending patterns can play in contributing to changes in income distribution using suggestive data from the developing countries.

As one of the world’s largest exporters of asparagus, Peru has developed a high‐tech system of asparagus production, processing and delivery that requires well‐trained and responsive workers. In this study we examine the role of both private and public sectors in preparing workers for the asparagus industry and the implications of this skill acquisition for lifelong learning policies. Drawing on surveys of managers and workers located at every link of the chain of asparagus production, we conclude that the private sector has taken the lead in providing lifelong learning opportunities for asparagus workers. The public sector’s most important contribution has been the establishment and support of an agricultural university in Lima that prepares many of the professionals working in asparagus production. We also find that asparagus workers have relatively high (by Latin American standards) levels of formal public education. We conclude by identifying several government‐sponsored initiatives that may be expand...

Our recent research on higher educational change in the BRIC countries suggests that greatly expanding university enrollment has little positive effect on equalizing earnings distribution. The main reason is that the payoffs for graduates have continued to rise despite many more higher education graduates entering the labor market.

Advanced industrial economies in the 1990s face a work crisis in creating wage employment in a changing job market without greatly increased wage inequality. But this crisis is political as well as economic, and the highly popular policy focus on more and better education as a solution to the crisis cannot be conceptually separated from the larger politics which surrounds it. The paper suggests that there is a fundamental conflict between a deregulatory philosophy of labor markets and policies that hope to use educational expansion as a means to increasing employment with higher productivity and wages. Rather than focusing on labor market deregulation, the paper argues, it is education and training that should be made more flexible.

The technological revolution is creating new goods and services and altering how and where they are produced. One of the principal issues for all countries is how these new technologies will affect employment and the composition of skills demand. Surveys the literature to attempt to answer three main questions: to what degree are the new technologies becoming diffused around the world? How much do they reduce, or increase employment? And do they reduce, or increase, the skills required in the labour force? Touches briefly on implications for educational policy. The survey suggests that because of new technologies, new organizations of production, changing employment conditions and the development of new sectors of production, the complementarity of general, formal schooling, in‐plant training and learning‐by‐doing to capital investment are increasing over time and that general schooling plus on‐the‐job training is more complementary to new technologies than is vocational schooling. The former combination is more likely to give workers the flexibility they need in such changing conditions.

This article serves as an introduction to an issue of the Economics of Education Review devoted to research on the role of education in explaining economic inequality among different ethnic/race and gender groups in national labor markets. The article admits that the broad nature of this topic implies that the research presented here is only a small sampling of the work being done worldwide. It argues nevertheless that these seven articles go beyond most in not only attempting to understand why individuals of certain ethnicities earn less or more than individuals from other groups and why men almost universally earn more than women, but in explaining why such ethnic and gender inequalities change over time , and what the role of educational inequality may have to do with these changes. The main contribution of the pieces, therefore, is in presenting alternative models and empirical data testing them for analyzing changing ethnic/gender inequalities worldwide. The articles cover Hong Kong, Israel, Peru, the Republic of Korea and the United States.

The 1980s in the United States were a decade of significant labor market gains for women of all races and ethnic groups in the context of increased wage inequality. This paper shows that in one important California labor market higher incomes paid to women (especially Anglo women) came primarily not from sectoral shifts but from broad-based (across all economic sectors) incorporation of women into high-skilled jobs within sectors and from higher incomes paid to women within occupational categories. Such changes were part of a more general move by industries to hire lower-cost female labor into previously white male-dominated professional and managerial jobs. The moves generally favored Anglo women over Latinas and women of Asian origin.

In this paper, we explore the evolution of the Indian State’s role in governance, and the implications this has for goal setting. We find that the Indian government’s activist role in governance marked a change from the colonial period. This, we suggest, was not due to changes in the relative influence of different stakeholder groups. It was instead due to new national developmental goals, particularly industrialization. Fairly quickly after independence, we find that higher education governance came to be exercised in different ways between the center and the states. Control over the system’s governance was to later become an arena of contest between the national (central) government and the provinces (states), leading to disagreements on strategies, such as on funding and regulation. In later phases, particularly in the third phase that began in 1984 and continues to the present, the disagreements intensified because educational priorities started changing due to the changes in the relative influence of stakeholder groups and new forces such as globalization.

The accepted wisdom is that rates of return to lower levels of schooling are higher than to university and tend to stay higher even as a country develops. But increasing evidence suggests that there are many exceptions to this rule, especially during sustained periods of rapid industrialization. This paper examines changes in the rates of return in South Korea in the 1970s and 1980s. It shows that during this period the pay-off to lower levels of schooling fell substantially in absolute terms and relative to investing in completed 4-year college education, leaving college rates considerably above primary and secondary. The main restriction on students taking further education in such situations may therefore not be self-selection based on declining pay-off to further investment, but rather imposed selection, either through highly imperfect capital markets, or restriction on the number of places available in 4-year colleges.

Few dispute the notion that the rapid development of industrialising economies in Asia and Latin America, new information technologies, liberalisation of trade, and global financial markets have contributed to the emergence of a truly global economy in the past ten years. Neither do they dispute that national economies almost everywhere in the world have become increasingly less 'national'. Most countries' foreign trade has increased, and in many, foreign investment and payment on foreign debt have become more prevalent than in the past. Labour movements also appear to be increasing, especially the movement of highly skilled labour. But does this mean that nation-states have decreased influence over the definition of economic and social life? Does globalisation imply the demise of the nation-state? I will argue that it does not. Yet, economic globalisation has transformed the role of the nation-state. It has done so mainly through the transformation of the labour process and through the shift of wealth creation to economic production increasingly based on knowledge and information, both of which are increasingly defined in global terms.

Since the mid-1970s the United States has been experiencing a profound shift in both the nature and political management of the post-World War II pattern of economic development and income distribution. This “Great U-Turn,” so labeled by Bluestone and Harrison (1988), has been characterized by the dramatic reversal after 1973 of the postwar rise in real wages and relative stability or decline in inequality. Since that time, real wages have stagnated or fallen and the distribution of income and wealth has become more unequal.

Worker control movements have shown considerable success in Europe and the United States, but these movements are generally restricted to the plant level, particularly in the US. This essay argues that the main variable for success in worker control is worker participation, and the possibility of participation in a worker control situation depends very much on the nature of the ideology which surrounds the movement itself. Thus, we argue that the context in which a worker control movement takes place may have a great deal to do not only with its success at the individual plant level but its possibilities for becoming more general than a single or several plant occurrence. We consider that the best ideologically cohesive force available for such a movement is a political party which serves as the ideological means through which the movement expresses itself, influences worker takeovers at the plant level, and the spread of such movements to other plants.

Martin C.arnoy (United States of America). Professor of Education, Stanford University. Specialist in the economic* of education, economic development and political economy. Among his many publications in related fields are Education as Cultural Imperialism, Economic Change and Educational Reform in Cuba, I955-I974~ and Education and Employment. It was not long ago that most leaders and planners in market economies believed that the solution to poverty lay in a rapid expansion of economic output. Two factors have made that solution obsolete: it was much more difficult than imagined to increase output; and, even in those economies with rapidly increasing per capita income statistics, the poorest half of the population did not fare signilicandy better. Leaders and policy-makers once viewed education as a key variable in expanding output and solving poverty. They thought that by raising the literacy rate and increasing the number of years of schooling in the labour force, economic and social development would follow rapidly. Market economies around the world expanded their educational systems, but economic development did not necessarily occur. Many countries now have a much more schooled labour force and higher income per capita than in the I95OS, but extreme poverty for the mass of their population and high unemployment continue unabated. A new feature has been added: the level of education of the unemployed has risen substantially. Under these conditions, leaders and planners gradually realized that economic growth alone would not solve the problem of poverty rapidly enough to meet internal political pressure. The distribution of output became, at the beginning of this decade, a crucial development variable. Again, education is to play a key role in redistributing income, just as it did in the growth process. But while the logic of education's relation to growth is tightly knit by the human capital model--though the economic pay-off to human capital investment

IN THIS PAPER, we discuss conflict and lack of conflict as they relate to the formation of manpower in capitalist economies. The aims of the organization of production in capitalist structures are to produce more capital and to reproduce the process of production. Capitalists, as individuals, want to increase the total production of the firm, and, as a class, want to maintain the economic and social structure which puts them at the top of the societal hierarchy. Furthermore, capitalism is distinguished from other forms of production in that the expansion of production depends on the accumulation of capital by individuals who have the right to use it as they see fit, and in that there is a separation between workers and capital. These two characteristics lead to another: owners of capital have an important influence on the traits that workers must have to participate in the production process.2 These preliminary remarks are important to our analysis. They show that capitalist production structures are organized around the ownership of physical capital. The basis of capitalist economic growth, therefore, is to maximize the return to capital rather than to labor. This is different from organizations of production in which workers and capital are inseparable, or where workers (or the worker state) own and operate capital. From an economist's point of view, both of these cases are more likely to use labor intensive technology and will tend to preclude unemployment.3 Under capitalism, however, there will be a tendency for unemployment to occur. This is likely because capitalists prefer capital-intensive technology, and such technology tends to reduce the growth of demand for labor and put downward pressure on wages. These features of capitalism also determine the distribution of socioeconomic roles. Those who have the attributes which owners of physical capital deem more "productive" end up higher on the socioeconomic ladder than those who are deemed less "productive." As we shall show later, these attributes are apparently much more closely connected with a person's parents' attributes than with some "objective" measure of cognitive ability. Within the capitalist hierarchy, there is competitive antagonism between var

The use of classroom educational television (ETV) is spreading rapidly in low-income countries, primarily as a means to deliver high-quality education to a large proportion of school-age children without the necessity of training great numbers of skilled, well-prepared teachers. The purpose of ETV, then, is to transform quickly school systems which are traditional and limited in the number of children they reach into modern, universally available systems which provide the best teaching possible through television programming from a central studio. The concept of giving all children in a country or region the best teaching methods and techniques available, no matter how isolated the community nor how limited the knowledge and capability of the local teacher, doubtless has great appeal. In theory, ETV should increase greatly pupils' cognitive learning, especially that of those who got the worst teaching before ETV. Therefore, not only should the introduction of television into the classroom increase pupil performance generally, it should reduce the difference in school performance between the poorest and richest regions of the country. It is in this context that ETV has been adopted by many school systems. Yet, despite its theoretical advantages, very little is known about the actual effects of educational television on children's school performance, or whether ETV really does equalize educational opportunities. Besides, ETV requires large investments of time, energy, and resources (capital, highly skilled labor) which are scarce in low-income countries. The investment in this new method is therefore being made with hardly any information about either the educational effectiveness of ETV compared

DEVELOPMENT PLANNING and analysis have generally assumed that economic growth is characterized by substantial urban-rural real wage differentials; that correspondingly, labor moves out of agriculture as rapidly as urban jobs become available; and that, despite migration, the wage differential can increase with growth, if urban production becomes increasingly more capital intensive than rural production. However, this characterization of economic development fails to demonstrate that there is anything inherently more productive about manufacturing or construction than agriculture. In most developing countries, industrialization is achieved through subsidization of the industrial/urban sector at the expense of the rural majority. Such subsidization is reflected not only in direct tax incentives, tariffs, exchange rates, and agricultural price ceilings, but also in the use of taxes to develop an urban-oriented infrastructure. The educational system is an important part of public investment of this sort, and it favors students with urban values and experiences. The distribution of product is therefore, at least in part, a function of who receives education and the quality of education received. Moreover, almost all developing countries are following a path of unbalanced growth, favoring the urban sector over the rural, and certain urban areas over others. With this in mind, my paper will examine the effect on rural-urban income differentials of differences in the educational infrastructure in Puerto Rico. Chosen largely because of the availability of reliable data, Puerto Rico is, however, also a model of long-run, sustained economic growth. Although untypical in many ways, especially in its special relationship with the United States, the island was a typical labor surplus, less-developed economy in 1940. Between 1940 and 1960, real GNP tripled and then almost doubled again between 1960 and 1968. Net real income per employed worker rose 267 per cent in the same 28-year period. In economic terms, all Puerto Ricans are probably much better off now than they were in 1940 or even 1960. Nevertheless, despite the rapid growth of net income per member of the agricultural labor force (3.4 per cent per annum, 19501968), the spread between earnings per worker in agricultural and non-agricultural employment increased. Even a massive migration from the agricultural sector to

THE QUANTITY OF SCHOOLING embodied in the population and labor force of many countries has increased rapidly during the last generation. Some of this increase has been due to autonomous governmental action which makes schooling more accessible. But much of the pressure for more schooling comes from the population itself. While the reasons for this "social demand" may seem obvious, little is known about the dynamics by which the incentives to take more schooling are translated into increased demand. This study concerns itself with one particularly important incentive-monetary gain-and attempts to explain how the pecuniary yield to investment in schooling affects the increase in the amount of schooling taken. The private rate of return to investment in schooling and the private present value of additional schooling are both measures of the economic incentive for individuals to take more or less education.' In this paper, we estimate for a given year (1959) both rates of return and present values to taking additional schooling in Puerto Rico.2 We relate these rates and present values to the increase in schooling per male worker in broad occupational categories over the 20 years, 1940-1960. This yields a crude estimate of the relation between the rate of return (or present value) as a measure of economic incentive and the increase in average schooling in the labor force. Based on the 1960 rate of return estimates, we then make some hypothetical statements about the behavior of our incentive measures over time, and how this behavior would affect the demand for additional schooling in Puerto Rico. The results of the study show that the increase in the per capita stock of schooling has been rapid in the 20 year period covered-greater for females than for males, somewhat greater in absolute terms (but not relative) for urban males than for rural, and greater in both absolute and relative terms for rural females than for urban females (see Table 1). Similarly, per male worker in

The welfare implications of a customs union for potential partners and third countries has been the subject of a number of theoretical and empirical studies.1 In the empirical work, welfare gains and losses from entering into a customs union are usually estimated in terms of whether the union brings individual economies closer to or farther from the optimal division of labor. Both Johnson's and Denison's estimates, which concentrate on the resource allocation effects of reducing trade barriers, show the increase in growth rates as a result of such gains to be relatively small. This treatment of customs-union theory necessarily assumes constant or increasing costs of production. Because of the perfect competition conditions of the model, it fails to deal with decreasing costs of production within the customs union. By reducing the cost of products in member countries, tariff reductions may increase long-run economic growth (and aggregate demand) even though prices of manufactured goods in the union do not immediately fall to world market prices.2 In the case of estimates made for the European Economic Community, it may well be that the market expansion created by European integration in addition to national market expansion since 1950 did not increase growth rates significantly in

It is generally recognized that education not only makes people "better, " but that it also helps them earn more and contributes to increases in national product. This pecuniary aspect of education, without ignoring or detracting from its nonpecuniary value, carries important implications for developing economies. The relationship between schooling and income of individuals can broaden the alternatives available to societies to effect economic growth and simultaneously to attain other aims, such as the redistribution of wealth and income.

Neoclassical theory assumes that individual workers can freely make a choice among a wide range of job options in the labour market, based upon their personal tastes and preferences. To the degree that institutions such as unions or monopoly producers are recognised in this process, they are considered to be aberrations which distort but do not displace the basic tenets of the theory. Segmentation theory, on the other hand, focuses on groups or classes of workers who face objectively different labour market situations which systematically condition their tastes and restrict their range of effective choices. The development and operation of institutions, which are central to segmentation theory, result in several, rather distinct segments within the labour market. Jobs within one segment differ from jobs within another segment along a number of dimensions, including wages, promotion opportunities, returns to education and training, and employment security. This paper examines the effects of segmentation on two important labour market processes—mobility and the determination of earnings. Labour market segmentation does not constitute a single, unified alternative to neo classical theory, f Segmentation proponents differ in the number and type of distinct segments they propose. Many investigators have focused on occupational divisions of the labour market, in the USA as well as other economies (e.g. Doeringer and Piore, 1971; Harrison, 1972; Reich, Gordon and Edwards, 1973; Rubery, 1978; Velloso, 1975; Liu, 1975). Some sociologists in the USA have recently focused on industrial divisions of the labour market, examining the effects of firm size, market power and unions on the earnings attainment process (e.g. Beck, Horan and Tolbert II, 1978; D'Amico, 1978). Finally, new variants attempt to combine occupational and industrial divisions into one, more complete, notion of segmentation (e.g. Carnoy, 1978; Edwards, 1979; Levin, Carnoy and others, forthcoming).

There is surprisingly little analysis of the employment and earnings impact on students of taking and completing Internet-based programs and of how it compares with earnings outcomes for graduates of face-to-face universities. This paper analyzes a follow-up survey of students who began attending the virtual Internet-based Open University of Catalonia (UOC) in the early 2000s. We find that, on average, they made smaller percentage gains in earnings than workers of similar age and initial education in the Spanish labor market. Yet, we also find that many of our UOC respondents were “high flyers,” already earning high salaries when they had begun studying at UOC. When we separate them out, we find that younger, more “normal” UOC students made larger earnings gains than the comparison group in the Spanish labor market. We emphasize the importance of disaggregating the varied clientele of online universities in assessing their economic payoffs.

Estimates of the rate of return to schooling, by level, have now been made for four Latin American countries: Chile, Colombia, Mexico, and Venezuela. The article presents a summary of the author's own results for Mexico and compares these results with the rates derived for the other three economies. The comparisons show that, although patterns of rates vary, Mexico and Venezuela-which experienced rapid economic growth in the 10-year period preceding the estimates-appear to have higher rates of return to primary and university students than do Chile and Colombia. A stronger but more tentative hypothesis is that there is a positive correlation between rates of growth and rates of return to both primary and university schooling. This may imply that in rapid growth situations it is these two levels that require the largest increases in investment. The comparison also brings out two other interesting points: (1) rapid investment in education is not a sufficient condition for economic growth; and (2) the average rate of return to schooling seems to be generally higher than the rate of return to physical capital, but the two rates are positively correlated.

Migration is an investment that man makes in himself, and it is possible to estimate the rate of return to that investment, at least in part, by measuring income differentials of migrants due to moving from one location to another. This study estimates pecuniary rates of return to migrants between Colombia and Mexico, by age at migration, and number of years of formal schooling of the migrants. The analysis shows not only that rates of return to migration between Latin American countries may be high, but also that these rates can be estimated with a limited amount of information about income earners in each country. The implications of the high rates for free labor movement in a Latin American Common Market, however, must be framed by constraints of expected shortages of skilled labor, in all Latin American countries and a general commitment by Latin American governments to redistribute income from capital to labor, protecting all levels of skills from immigration.