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This paper undertakes a quantitative analysis of substantial reforms to the system of higher education (HE) finance first announced in 2004 and then revised again in July 2007. The reforms introduced deferred fees for HE, payable by graduates through the tax system in the form of income-contingent repayments on loans subsidised by the government. Lifetime earnings that have been simulated by the authors using innovative methods, are used to analyse the likely distributional consequences of the reforms for graduates. It is shown that graduates with low lifetime earnings will pay less for their HE than graduates higher up the lifetime earnings distribution compared to the system operating before the reforms. Taxpayers will bear substantial costs due to the interest rate and debt write-off subsidies. The extent to which the reforms are likely to shift the balance of funding for HE between the public and private sector is also analysed, as well as the likely distributional consequences of a number of variations to the system such as removing the interest subsidy from the loans. Copula Model for Earnings Dynamics is appended. (Contains 6 tables, 12 figures and 32 footnotes.)

There is a large gap in higher education attainment between different groups of society, especially along gender, class and ethnic dimensions. Reducing these gaps in attainment has been at the forefront of policy makers, not only in this country but also in most advanced economy with policies ranging from financial support to positive discrimination. However, policies can only be effective if the reasons behind these gaps are understood. This research explores another reason why individuals from specific group do not invest in higher education. The authors postulate that they may have misbelieves in their own ability and under estimate their chance of success. To test this hypothesis the authors rely on two datasets. The first is the 2003 PISA (Programme for International Student Assessment) which surveyed 15 year old, and administered a comprehensive test in mathematics. The second dataset is based on an online survey of first year students in two British universities. The authors find that males overestimate their own performance in math and English, as well as their position in the score distribution. Relative to students with the most favourable background, working class students under-estimate their performance in math and white students under-estimate their relative position in both math and English. The gender and class gaps are especially large in numeracy, at around 20% of the average score. Self-perception also correlates with educational confidence in general but the effect is small. The effect of self-perception on the decision to participate in higher education does not seem to work through its effect on risk aversion and the returns to higher education, because self-perception is only weakly correlated with these factors. Policies that raise academic self-confidence in schools are, unsurprisingly, likely to raise participation rates but are unlikely to close participation gaps unless targeted only at underrepresented groups. This is not to suggest that students should be praised whatever their results but on the contrary, trained to develop objective views about their own ability. (Contains 7 tables, 3 figures and 23 footnotes.)

When describing the determinants of economic or social outcomes, economists often have a very simplified view of skill. Failure to take into account the fact that skill is intrinsically a multidimensional object may misguide both research and the design of social policy. In this paper, the authors analyse the consequences and determinants of cognitive and noncognitive (social) skills at age 11, using data for Great Britain from the National Child Development Survey (NCDS). The authors document the importance of these skills for schooling attainment, labour market outcomes and social behaviours at various ages, and analyse the role of family background and the home learning environment in the formation of these skills. The authors find that an overall measure of non-cognitive skill is important for a host of outcomes, including whether or not an individual stays on at school beyond the age of 16, whether they have obtained a degree by age 42, employment status at age 42, work experience between ages 23 and 42, wages at age 42, smoking at age 16, truancy before age 16, exclusion from school, teenage pregnancy, involvement with crime (ages 16 and 42), and health at age 42. Furthermore, the impact of this measure of non-cognitive skill does not differ in any systematic way across particular subgroups of interest (including those defined according to parental education, or father's socioeconomic status). The authors go on to split this measure of non-cognitive skill into twelve different domains. As an example, the authors find that "inconsequential behaviour" at age 11 (for example, misbehaviour in class) is associated with a reduction in the probability that an individual will stay on at school beyond age 16, a reduction in their wages at age 42, an increase in the likelihood that they will be a heavy smoker at age 16, and an increase in the probability that they will have played truant or been involved in crime by age 16. Further, the authors find that depression at age 11 is associated with a reduction in the probability that an individual will have obtained a degree by age 42, an increase in the probability that the individual will be a heavy smoker at age 16, an increase in the likelihood that they will have been excluded from school, and an increase in the probability that they will report symptoms of depression at age 42. These findings together make it clear that a vision of the world in which skill is thought of as a one-dimensional object is extremely inadequate. Further, the authors show that both cognitive and non-cognitive skills are strongly dependent on family background and other characteristics of the home learning environment, and that this is likely to be for both genetic and environmental reasons. More importantly, their work suggests that social skills may be more malleable than cognitive skills, which--if true--suggests that there may be greater scope for education policy to affect social skills rather than cognitive skills. Appended are: (1) Data; (2) Impact of family background controls; and (3) Differences between subgroups of interest. (Contains 22 tables, 8 figures and 72 footnotes.)

During the early Nineties the proportion of UK graduates doubled over a very short period of time. This paper investigates the effect of the expansion on early labour market attainment, focusing on over-education. We define over-education by combining occupation codes and a self-reported measure for the appropriateness of the match between qualification and the job. We therefore define three groups of graduates: matched, apparently over-educated and genuinely over-educated; to compare pre- and post-expansion cohorts of graduates. We find the proportion of over-educated graduates has doubled, even though over-education wage penalties have remained stable. This suggests that the labour market accommodated most of the large expansion of university graduates. Apparently over-educated graduates are mostly undistinguishable from matched graduates, while genuinely over-educated graduates principally lack non-academic skills such as management and leadership. Additionally, genuine over-education increases unemployment by three months but has no impact of the number of jobs held. Individual unobserved heterogeneity differs between the three groups of graduates but controlling for it, does not alter these conclusions. Appended are: (1) Sample selection; and (2) First job earnings determinants--OLS. (Contains 6 figures, 9 tables and 15 footnotes.)

We consider the influence that mobile pupils have on the academic achievements of other pupils in English primary schools. We find that immobile pupils in year-groups (a la US "grades") that experience high pupil entry rates progress less well academically between ages 8 and 11 than pupils in low-mobility year groups (grades), even within the same school. The disruptive externalities of mobility are statistically significant, but actually very small in terms of their educational impact. An increase in annual entry rates from 0 to 10% (a 4 standard deviation change) would set the average incumbent pupil back by between 1 and 2 weeks, or about 4% of one standard deviation of the gain in pupil achievement between ages 7 and 11. (Contains 1 figure, 7 tables and 7 footnotes.)

We explore the association between urban density and pupil attainment using three cohorts of pupils in schooling in England. Although--as widely recognised--attainment in dense urban places is low on average, this is not because urban environments disadvantage pupils, but because the most disadvantaged pupils with low average attainments attend the most urbanised schools. To control for this, we exploit changes in urban density faced by pupils during compulsory transition from Primary to Secondary school, and measure educational progress at the end of the Secondary phase, relative to attainments at the end of Primary schooling. Our results suggest that there are small but significant benefits from education in schools in more densely urbanised settings: Pupils in schools in relatively dense places--measured in terms of school density and other urban indicators--progress faster than others in their cohort, but the elasticity is low, at around 0.02. We detect this density advantage even amongst pupils moving relatively short distances between Primary and Secondary schools within urban areas, so we cannot attribute it to broad urbanisation effects experienced by pupils making rural-urban school moves. A more likely explanation lies in greater school choice and competition between closely co-located educational providers. Estimation of Two-Way Fixed Effects is appended. (Contains 6 tables, 1 figure and 18 footnotes.)

In this paper we evaluate the labour market value of basic skills in the UK, focusing on the wage and employment returns to having better literacy and numeracy skills. We draw on literacy and numeracy assessments undertaken by all cohort members of the UK 1970 British Cohort Study. The data used are very rich and allow us to account for potential ability bias, including as they do early childhood assessments of ability. We find that the literacy and numeracy effects on earnings are over and above any general effect on earnings from a person being more cognitively able. We also assess whether the value of basic skills, in terms of wage returns, has increased over time, using a cross cohort analysis based on the 1958 National Child Development Study cohort and the 1970 British Cohort Study. Our results show that literacy and numeracy skills retained their high value in the labour market over the period 1995-2004, despite numerous policy attempts to increase the supply of basic skills during this period. Appended are: (1) UK Classifications of levels of literacy and numeracy; (2) British Cohort Study 1970--2004 sweep at age 34; (3) Means and Standard errors of the preferred BCS sample (N=3131); and (4) Full specification for Table 2 (main text): The relationship between age 34 basic skills and earnings: men and women. (Contains 12 tables and 31 footnotes.)

The recent industrial action taken by the Association of University Teachers (AUT) has given the issue of academic pay high prominence in the UK press. There appears to be a remarkable consensus that higher education academic salaries are too low, relative to other groups of workers in the UK, and that this is leading to an academic "brain drain". There is concern that this in turn will result in lower quality higher education, as universities fail to attract the "brightest and the best". To rise above the rhetoric, there is a pressing need for robust evidence on relative academic salaries. In this paper, we compare the salaries of Higher Education teaching professionals in the United Kingdom with those of other comparable professionals. We offer evidence on relative salaries in HE academia over the last decade or so and we compare academic salaries to a range of different comparator groups, including some specific occupational groupings that one might view as more similar, in terms of unobserved characteristics, to academics. We then consider the extent to which the gap between the earnings of HE academics and that of other occupations is attributable to differences in the characteristics of academics, for example the fact that they are more highly educated on average, or to differences in the price paid for a given set of characteristics. We conclude that HE teaching professionals earn somewhat lower earnings than most public sector graduates and do particularly poorly compared to most other comparable professionals; they also work longer hours than most. In particular, academic earnings compare poorly to those in the legal professions, consultants physicians and dental practitioners (across both the public and private sectors). On the other hand, there are groups of public sector workers that do worse than HE academics, and in particular FE academics earn significantly less. Technical Information is appended. (Contains 7 tables and 2 footnotes.)

Despite being central to government education policy in many countries, there remains considerable debate about whether resources matter for pupil outcomes. In this paper we look at this question by considering an English education policy initiative--Excellence in Cities--which has been a flagship policy aimed at raising standards in inner-city secondary schools. We report results showing a positive impact of the extra resources on school attendance and performance in Mathematics (though not for English) but, interestingly, there is a marked heterogeneity in the effectiveness of the policy. Its greatest impact has been in more disadvantaged schools and on the performance of middle and high ability students within these schools. A simple cost-benefit calculation suggests the policy to be cost-effective. We conclude that additional resources can matter for children in the poorest secondary schools, particularly when building on a solid educational or ability background. However, small changes in resources have little or no effect on the "hard to reach" children who have not achieved a sufficiently strong prior level. Data Appendix is included. (Contains 15 tables, 3 figures and 27 footnotes.)

This paper investigates a unique feature of the English educational system to estimate the causal effect of compulsory schooling on labour market outcomes. We examine school leaving rules that allow for discrete variation in exit dates by date of birth within school cohorts. This natural experiment enables a regression discontinuity design that differences out confounding factors discussed in the literature. Individuals compelled to stay in school for as little as three months longer than their classmates tend to achieve significantly higher qualification levels and experience better labour market outcomes. Our analysis of variation of impacts by age of compulsory schooling allows us to provide valuable new insights on the role of education credentials in the labour market. Appended are: (1) Details on the Matched JUVOS-NES Dataset; and (2) General features of the U.K. educational system. (Contains 11 tables, 15 figures and 39 footnotes.)

The issue of social segregation in schools has seen a recent resurgence of interest--in the US, UK and internationally--as the debate rages on about whether policies that expand families' freedom to choose amongst schools encourage divergence or convergence in the types of pupil different schools admit. Most attention has been focussed on segregation along lines of ethnic or social background. Yet, the real consideration that seems to be in the back of most people's minds is the issue of segregation or stratification of schools along lines of pupil ability. We look explicitly at this issue using data on the population of pupils entering Secondary school in England from 1996 to 2002. Our study does highlight wide disparities between peer-group ability in different schools. But we also find that, contrary to popular opinion, almost nothing has changed over these years in terms of the way pupils of different age-11 abilities are sorted into different Secondary schools. Appended are: (1) Construction of the smoothed inverse-cumulative distributions; (2) Table 6: Sample sizes in base year; (3) Table 7: Factor analysis of pupil test scores, London 1996; (4) Figure 3: Bootstrap 95% Confidence interval on inverse-cumulative distribution, London, 1995; (5) and Table 8: Cell sizes for school types in Table 4. (Contains 2 figures, 8 tables, and 17 footnotes.)

We provide estimates of the effect of attending a Faith school on educational attainment progress during the Primary education phase in England. We argue that there are no credible instruments for Faith school attendance. Instead, we control for selection on religious schooling by tracking pupils over time and comparing attainments of students who exhibit different levels of commitment to religious education through their choice of Secondary school and residence. Our findings suggest that, once family preferences and selection into religious education are controlled for, Faith schools have only a very small effect on pupil educational progression in Primary school, this effect being between zero and under one-percentile on test scores at age 11, conditional on scores at age 7. Appended are: (1) Additional tables; and (2) Denominational differences. (Contains 14 tables and 20 footnotes.)

We analyse in detail the factors that lead to intergenerational persistence among sons, where this is measured as the association between childhood family income and later adult earnings. We seek to account for the level of income persistence in the 1970 BCS cohort and also to explore the decline in mobility in the UK between the 1958 NCDS cohort and the 1970 cohort. The mediating factors considered are cognitive skills, noncognitive traits, educational attainment and labour market attachment. Changes in the relationships between these variables, parental income and earnings are able to explain over 80% of the rise in intergenerational persistence across the cohorts. Appended are: (1) Comparability of noncognitive measures; and (2) Variables. (Contains 1 box, 2 figures, 11 tables, and 10 notes.)

A large proportion of the gender wage gap is usually left unexplained. In this paper, we investigate whether the unexplained component is due to misspecification. Using a sample of recent UK graduates, we introduce variables on career expectations and character traits, variables that are typically not observed. The evidence indicates that women are more altruistic and less career-oriented than men. The main difference concerns career break expectations which explains 10% of the gender wage gap in our favoured model. By omitting attitudinal variables most studies are likely to over-estimate the unexplained component of the gender wage gap. Women with a more traditional view concerning childrearing are also found to have less intensive search behaviour. These results suggest that without a change in attitudes, the gender wage gap is likely to remain at its current level. Gender wage gap over time--Labour Force Survey 1998 is appended. (Contains 7 tables and 17 footnotes.)

Children's outcomes are strongly correlated with those of their neighbours. The extent to which this is causal is the subject of an extensive literature. An identification problem exists because people with similar characteristics are observed to live in close proximity. Another major difficulty is that neighbourhoods measured in available data are often considerably larger than those which matter for outcomes (i.e. close neighbours). Several institutional features of France enable us to address these problems. We find that an adolescent's performance at the end of junior high-school are strongly influenced by the performance of other adolescents in the neighbourhood. (Contains 14 tables, 17 footnotes, and a technical appendix.)

British secondary schools moved from a system of extensive and early selection and tracking in secondary schools to one with comprehensive schools during the 1960s and 70s. Before the reform, students would take an exam at age eleven, which determined whether they would attend an academically oriented grammar school or a lower level secondary school. The reform proceeded at an uneven pace in different areas, so that both secondary school systems coexist during the 1960s and 70s. The British transition therefore provides an excellent laboratory for the study of the impact of a comprehensive versus a selective school system on student achievement. Previous studies analyzing this transition have typically used a value added methodology: they compare outcomes for students passing through either type of school controlling for achievement levels at the time of entering secondary education. While this seems like a reasonable research design, we demonstrate that it is unlikely to successfully eliminate selection effects in who attends what type of school. Very similar results are obtained by looking at the effect of secondary school environment on achievement at age 11 and controlling for age 7 achievement. Since children only enter secondary school at age 11, these effects are likely due to selection bias. Careful choice of treatment and control areas, and using political control of the county as an instrument for early implementation of the comprehensive regime do not solve this problem. (Contains 1 figure, 9 tables, and 4 footnotes.)

It is a common belief that children will thrive if educated amongst better class and schoolmates. It is a belief that guides many parents in their choice of school, and has important implications for policy on school choice and organisation. Many studies have tried to measure this "peer-group" effect, but the enterprise is plagued by conceptual and empirical difficulties. In this study, we use the population of state Secondary school pupils in England to tease out how pupil attainments at age 14 respond to differences in the prior, age-11 attainments of their current school grade peer-group. Data on home addresses and school attendance allow us to compare outcomes of children who live in the same street, or who attended the same Primary school up to age 11, but then move on to different Secondary schools with different peer-group quality. These "peer-group" effects seem to exist, but they are small in magnitude--a 1 s.d. increase in peer-group prior attainments allows a pupil to improve their own score by barely 0.08 of a standard deviation. We tackle various gnarly empirical problems arising in regression models of pupil attainments that incorporate individual and group prior attainments as explanatory variables. Estimates from such models are seriously biased by transient components in prior pupil attainments, correlation between current and prior peer-group characteristics and by ability sorting into Secondary schooling. We address these issues by using teachers predictions as instruments for prior attainments, defining a pupil's current peer-group in terms of those school mates with whom he or she has had no contact in the past, and by predicting current peer-group attainments with the productivity of their origin Primary schools, measured by the gain in attainments of different cohorts between ages 7 and 11. (Contains 1 figure, 7 tables, and 14 footnotes.)

In this paper we examine links between pupil mobility and pupil and school characteristics at all levels of compulsory schooling in England. We derive measures of mobility from two academic years of the Pupil Level Annual School Census (PLASC) data, a unique national administrative pupil level longitudinal data source. Our findings suggest that mobile pupils are more socially disadvantaged than non-mobile pupils and are significantly less likely to have a good prior education record. Moreover, we find that pupils are less likely to move if the school they attend has good average performance levels. Finally, when children move school, they are more likely to end up in a school with better Key Stage performance than the one they left, but this improvement is significantly more marked for children from better off backgrounds. The Appendix describes issues involved in how the authors calculate various measures used in this paper.(Contains 9 tables and 13 footnotes.)

The paper aims to make a methodological contribution to the education segregation literature, providing a critique of previous measures of segregation used in the literature, as well as suggesting an alternative approach to measuring school segregation. It also provides new empirical evidence on changes in the extent of socio-economic segregation (measured by free school meals (FSM) entitlement) in English schools during the last fifteen years. Specifically, the paper examines Gorard "et al.'s" (2000a, 2003) finding that FSM segregation between schools fell significantly in the years following the 1988 Education Reform Act. Using Annual Schools Census data from 1989 to 2004, the paper challenges the magnitude of their findings, suggesting that the method used by Gorard et al. actually overstates the size of the fall in segregation by 100%. Our results show evidence of an increase in the index of dissimilarity in many Local Authorities, especially in London, although in the South-East as a whole we note that it falls. We also observe higher segregation in LEAs with higher proportions of pupils at voluntary-aided schools. We cannot confirm however, whether this is a causal relationship. It is not necessarily the case that the rise in the segregation index in these Local Authorities is attributable to the behaviour of VA schools. Much of this paper is a critique of previous methods used to measure segregation in schools. For example, we suggest that the GS index is not the optimal way of measuring changes in school segregation for the following reasons: (1) GS is not bounded by 0 and 1: the upper boundary varies according to FSM eligibility, so GS is better described as an "indicator" rather than an index of segregation; (2) GS is not symmetric, meaning that it is capable of showing that FSM segregation is rising and NONFSM segregation is falling simultaneously; and (3) GS is actually systematically variant to changes in overall FSM eligibility, except in the most stringent and unlikely of circumstances (the strict proportionate change in FSM); therefore we can properly describe it as composition variant. It had a tendency to fall as FSM eligibility rises, regardless of the change in the unevenness of school's shares of FSM and NONFSM pupils. In this paper we make the case for a segregation curve approach to measuring segregation and use one exemplar index, the index of Dissimilarity, to re-evaluate the extent of school segregation in England over the last fifteen years. What can we conclude? (1) There was no pervasive increase in segregation over the period; (2) There are a number of potential explanations for this. For example, it may be that de facto school choice did not in fact increase during this period due to capacity constraints; (3) The analysis does however provide clear evidence of an increase in segregation, as measured by the index of dissimilarity, in many Local Authorities, particularly in London. The index is also higher in LEAs with higher proportions of pupils educated at voluntary-aided schools, although this relationship is not necessarily causal; (4) We have not been able evaluate the causal impact of policies that give schools increased control over their own admissions on segregation, however we have found an association between LEAs with higher proportions of pupils in schools that control their own admissions or have explicit select by ability and the level of FSM segregation. We suggest that the level of measured segregation be carefully monitored over time, as the proportion of schools that are LEA community schools continues to fall; and (5) We note that pupil numbers in secondary schools will fall from 2005. It will be important that measures are taken to improve the ability of disadvantaged pupils to take up free places in the schools of their choice, otherwise the spare capacity in the system may well result in rising levels of segregation and in particular a concentration of disadvantaged pupils in some schools operating in deprived areas. We conclude that deciding how best to measure segregation is complex, combining fundamentally normative judgements about what exactly one intends to measure, with more technical judgements about the appropriate properties of the chosen measure. We believe that we have made a good case for a specific approach, being open about the normative judgements we have made to reach our conclusion. We have chosen to criticise one alternative approach to measuring segregation, GS, examining its properties in detail. Further research is certainly needed to subject alternative methods of measuring school segregation, such as multilevel modelling or the isolation index, to the same level of scrutiny. (Contains 6 tables, 13 figures and 12 footnotes.)

Throughout the post-war period there have been many attempts to reform the UK education system, often with an explicit intention to try and make it more productive. The list of education policy reforms that have been attempted over the last 50 years is quite extensive, and recently the UK (and in particular England and Wales) has introduced many innovative market-oriented reforms to its education system, in an attempt to raise standards. The most striking recent reform is that parents have increasingly been given much more choice in terms of the school attended by their children, and schools have been forced to be more accountable. Other notable reforms include a nationally prescribed curriculum, vigorous attempts to raise participation in post-compulsory schooling and the introduction of tuition fees for higher education. In this article the authors describe a number of the more important educational reforms that have been introduced in the UK during the last twenty years or so, and where possible they provide evidence of their impact. However, in the UK, although economists and others are increasingly able to inform policy-makers on the impact and efficacy of specific policy interventions, the evaluation of specific policies in a rigorous manner unfortunately remains relatively unusual. This is mainly because the design of policy interventions is often such that they are not amenable to economic evaluation. Here the authors highlight what one can view as robust findings on each policy intervention, and point to where more evidence is needed. (Contains 4 tables, 2 figures and 5 footnotes.)

In the UK, there is a marked gender gap in the educational attainment of boys and girls. At the end of compulsory education, 10 per cent fewer boys achieve 5 or more good GCSEs. This gap is by no means confined to GCSE. It is evident at all Key Stages. Furthermore, some indicators suggest that the gap has widened over time. In this paper, we document the evolution of the gender gap at various stages of compulsory education in England. We consider the importance of some possible explanations for the gender gap--in particular, factors that may explain the observed changes over time. Analysis of this issue is important in the context of research on the gender wage gap. However, it also raises policy-relevant issues in relation to whether changes in the school system can effect a change in the gender gap in educational achievement. We find that it is in secondary school, rather than primary school, where the gender gap has widened most noticeably over time. Controlling for attainment at the end of primary school makes very little difference to the measured gender gap at age 16. We consider the potential role of school based factors: school inputs; teaching practice; and the examination system. We show that the average gender differential cannot be explained by factors that vary across schools (i.e. it cannot be attributed to heterogeneity across schools in how they use inputs). However, this does not mean that teachers cannot influence the gender gap in attainment. We show that the introduction of the "literacy hour" and "numeracy hour" in primary schools made a difference to the gender gap in English and Maths respectively at Key Stage 2. However, these strategies are too recent to have made an impact on the gender gap observed in secondary school. The timing of the emergence of the gender gap in secondary school coincides with the change in examination system from O-levels to GCSEs. We argue that the importance of coursework in the GCSE examination is likely to be a key explanation for the emergence of the gender gap at age 16. Another very important explanation may be a gender differential in skills that are taught and tested in different types of system (as well as the mode of assessment). We also consider the potential role of social and economic changes that would influence the relative achievement of boys and girls at age 16. However, the most compelling explanation to explain the specific timing of the gender gap at this age in the England comes from the change in examination system. Taken together with the evidence on the literacy and numeracy strategies, this shows that education policy can most definitely have an impact on the gender gap in achievement, whether this is intended or not. Appended are: (1) Comparing Cohort and National data; (2) Gender Differences at End of Secondary School; (3) Gender Differences at A-level: School Leavers with 2 or more A-levels as a percentage of the 17 year old population; and (4) Gender Gaps and Parental Education and Income, Evidence from the General Household Survey. (Contains 7 tables, 1 figure and 17 footnotes.)

We estimate the impact of compulsory schooling on earnings using the changes in compulsory schooling laws for secondary schools in West German states during the period from 1948 to 1970. The German school system streams students into three separate types of secondary schools and the change in compulsory schooling laws affected students in the lowest level stream. There is a sizeable literature studying the returns to compulsory schooling for other countries, including the UK. These studies typically indicate returns in the range of 10 to 15 percent for every additional year an individual stays in school in response to a raising of the school leaving age. While our research design is very similar to many of these previous studies, we find very different estimates of the returns. We find no return to compulsory schooling in Germany in terms of higher wages. There are various possible explanations for the different returns in Germany, which we discuss in the paper. One possibility is that returns are low because of wage rigidity. Institutions like union wage setting may prevent the emergence of sufficient wage differentials. In order to investigate this possibility we also look at the employment effects of the change in compulsory schooling. If firms cannot differentiate wages sufficiently by skill, they should be more interested in hiring the more skilled workers (in this case the ones with more schooling). We find no evidence for this. We also find no evidence for any returns among the self-employed, who should not be subject to institutional wage rigidities. A second possibility is that an additional year of schooling matters less because of the existence of the apprenticeship training system in Germany. We also find no evidence for this explanation by looking at the returns for school leavers, who do not get any post-compulsory training or schooling. We conjecture that the different returns in Germany may be due to the fact that the basic skills most relevant for the labor market are learned earlier in Germany than in other countries. We present some evidence that the school leavers affected by the law change only tend to use very basic academic skills in their jobs, and that Germans typically score relatively well in international comparison tests on those types of skills. This is true in particular in comparison with the Anglo-Saxon countries, where returns to compulsory schooling are high. Hence, returns to compulsory schooling may be low in Germany because the school system is (or has been) rather successful in endowing students with the skills relevant for the labor market. Sample Means are appended. (Contains 11 tables, 3 figures and 19 footnotes.)

In recent years the role of investment in Information and Communication Technology (ICT) as an effective tool to raise educational standards has attracted growing attention from both policy makers and academic researchers. While the former tend to express enthusiastic claims about the use of new technologies in schools, the latter have raised concerns about the methodological validity of much of the research undertaken. The view that ICT could help to raise educational standards dates back to the Fifties, and builds on some of the original findings by the Harvard psychologist Skinner (1954, 1958). More recently, support for the effectiveness of ICT as a teaching and learning device comes from the educational literature. Yet results are generally inferred from simple correlations between ICT and pupil performance, without taking full account of other factors (such as school characteristics, resources and quality) that may be related to both ICT resources and pupil outcomes. In recent years, and in parallel with the widespread belief that new technologies account for much of the productivity resurgence in workplaces in the Nineties (see Jorgenson and Stiroh, 2000), the UK government has motivated its sizable ICT investment in schools by stressing the importance of ICT in raising educational standards and creating opportunities for every child. The positive rhetoric about ICT in the UK has been backed up by considerable government investment. Starting from 1997, the government has encouraged the widespread use of ICT for teaching and learning in schools: formal plans were set-up under the "National Grid for Learning" in order to equip schools with ICT facilities and train teachers to make an effective use of ICT. Between 1998 and 2002, ICT expenditure in England almost doubled in secondary schools, and increased by over 300 percent in primary schools. In this paper, the authors ask whether this considerable increase in ICT investment has made any difference to educational standards. More specifically, they evaluate whether changes in ICT investment had any causal impact on changes in educational outcomes in English schools over the period from 1999 to 2003. To do this, they mainly rely on administrative data at the level of Local Education Authority. They also make use of detailed information contained in a survey about ICT use in English schools to help interpret their findings. To identify the causal impact of ICT use on pupil achievement, they exploit a policy change that occurred in 2001, using an Instrumental Variable (IV) approach. Specifically, they consider how a change in the rules governing ICT investment in different regions of England led to changes in ICT investment and subsequently changed educational outcomes. In their quasi-experimental setting, they identify the impact of ICT investment using the magnitude of the gain or loss experienced by different LEAs as a result of the change in the funding system. The results should be interpreted as the causal effect of ICT investment on educational outcomes for LEAs that were substantially affected by the change in the funding system over this particular time period (i.e. it is not the average effect of a change in ICT investment for the whole population of schools). Unlike previous economic studies, they find evidence for a positive causal impact of ICT investment on educational performance in primary schools. This is most evident in the teaching of English, where they also show evidence that there is high use of ICT for teaching purposes. They also observe a positive impact for Science, though not for Mathematics. Hence, in this context, there is evidence of a causal link between a substantial increase in ICT investment and a rise in educational standards. Appended are: (1) Is ICT Funding Crowding out other LEA funding?; and (2) Descriptive Statistics and Balancing Properties of the Instrument. (Contains 5 figures, 12 tables and 23 footnotes.)

The expansion of school choice and greater competition between schools is currently the centrepiece of government educational policy in the UK. There is an increasing emphasis on parents' right to choose their preferred schools, and whilst many parents may value choice itself, the advocates of these market oriented reforms usually argue that the main benefits are to force educational providers to improve standards. In this study we look to see whether we can find any empirical foundation for these claims amongst the primary school population in the south east of England. Our key findings are that: (1) Pupils who have a wider choice of schools at their place of residence perform no better than those with more limited choice; (2) Secular schools located in places where they face strong competition from other schools perform no better than secular schools in more isolated, monopolistic settings; (3) Church schools seem to respond more positively to competition, particularly from other church schools. We have some evidence to show that pupils in more isolated church schools perform less well than those in competitive church school "markets"; (4) The benefits of competition seem strongest amongst pupils in church schools with the highest concentrations of low-income children; and (5) On balance, choice and competition does not seem to be generally effective in raising standards in the school context. Although the issue has been widely researched, especially in the US, existing evidence on the beneficial effects of competition on educational achievements is at best mixed, and does not provide a solid ground for policy conclusions. We use a large administrative census of primary school pupils in London and the surrounding area. This allows us to improve on the existing literature along two dimensions. First, exploiting pupil residential details and information on school location, we construct separate "choice" and "competition" indices and study their impact on pupil attainment. Choice is a property of pupil residential location, and depends on the schools from which a family can feasibly choose. Competition is a property of schools, and depends on the number of institutions competing for the same pool of pupils. Secondly, we make use of the fact that institutional barriers limit school attendance outside the Local Education Authority (LEA) of residence and that, as a result, very few pupils cross district boundaries to attend primary school. Because of this, pupils near LEA boundaries face less choice and schools near LEA boundaries tend to face less competition. We can use this feature of the admissions system to help solve the difficult issues of reverse causation arising from the fact that school performance may influence the patterns of choice and competition that we observe. Controls, summary statistics are appended. (Contains 6 figures, 9 tables and 21 footnotes.)

The student revolt of May 1968 led to chaos across France, temporarily shaking the economic and political establishment. The crisis was unanticipated, unpredictable and short-lived. The famous events coincided with the period in which examinations are undertaken. In the university context, exams became a central aspect of the bargaining process between students and the authorities with the former successfully bargaining for "light-touch" exams "to avoid harming students who have spent a lot of time struggling for a better university". The general chaos and student lobbying led to the abandonment of normal exam procedures throughout the higher education system. For example, the important examination taken for the baccalaureate (success at which guarantees entry to university) only involved oral tests. As a result, the pass rate for various qualifications increased enormously in that one year. In this report, the authors show that the lowering of thresholds had important consequences for students at an early (and highly selective) stage of the higher education system. The events enabled a significant proportion of students born between 1947 and 1950 (particularly in 1948 and 1949) to pursue more years of higher education than would otherwise have been possible. They compare outcomes for cohorts affected by the relaxation of the examinations with cohorts that were too young or too old at this time. There is a wage premium of 2-3 percent for the most affected cohorts and an increased probability of achieving a high-status occupational position. They also show that persons from a middle-class family background were more likely to be among the "marginal students", and hence those for whom the effects of easier examinations are particularly evident. Finally, they show that returns were transmitted to the next generation on account of the relationship between parental education and that of their children. (Contains 4 figures, 7 tables and 27 footnotes.)

There has been a substantial rise in British education levels in recent decades, and new empirical evidence suggests that less able but wealthier children have benefited most from this expansion, at least during the 1970s and 1980s. There are many potential explanations for this trend. For example, during this period, the UK's highly selective "grammar school" system was largely dismantled. It is possible that reducing the extent of selection by ability in the UK education system may have altered the relationship between ability, family background and educational achievement, reducing the impact of ability on achievement and increasing the impact of family income and other family background factors. We test this hypothesis using data from the UK in the 1970s. Whilst the impact of the UK grammar system is of course of enormous historical interest, this issue also has significant policy relevance today. Certainly selection remains a topical issue. In the UK and indeed in the US, there have been recent policy initiatives that have attempted to explicitly or implicitly increase selection in the school system. Furthermore, in some parts of the UK, grammar schools remain an important feature of the education system. In this paper we explore and quantify the relationships between early cognitive ability, family background and school selection on the one hand, and educational achievement on the other, focusing particularly on the effects of selective schooling on different groups of students. For example, we assess the impact of selection on higher and lower ability pupils. Our results indicate that the most able pupils in the selective school system did do somewhat better than those of similar ability in mixed ability school systems. Thus the grammar system was advantageous for the most able pupils in the system, i.e. highly able students who managed to get into grammar schools. On the other hand, lower ability pupils did not do systematically better or worse in the selective school system. Many commentators have argued that the "comprehensive experiment" failed in England and Wales, reducing standards and educational achievement. To some extent our findings support this. The shift to mixed ability schooling did reduce the educational achievement of the most able. From an historical perspective, our results also suggest that the dismantling of the UK selective school system played some part in ensuring that the subsequent expansion of the education system disproportionately benefited less able (but wealthier) students. In terms of the current policy agenda, our evidence is potentially comforting to those who endorse increased selection in the education system, suggesting that the most able might benefit from a more selective system and that the negative impact of selection on the rest of the school population is likely to be small. However, the new forms of selection being introduced into the education system today are very different from the UK grammar school system of the 1960s. Furthermore, there are myriad other differences between the current UK education system and that of forty years ago, in terms of pupil characteristics, school standards, school enrolment patterns, curricula developments etc. All these other factors will also impact on pupil achievement, and interact with any selection that might be introduced into the system. Further research on current forms of selection is therefore urgently needed. Appended are: (1) Probability of attending a school in selective system conditional on comprehensive school density; and (2) Reduced form effects of local authority share in non-comprehensive schools. (Contains 11 tables and 24 footnotes.)

This paper examines the impact of a program that subsidizes children to remain in school for up to two years beyond the statutory age. The programme was first piloted in a number of areas in England from September 1999. Evaluating such interventions is of course critical to the shaping of education policy and the effectiveness or otherwise of a conditional cash transfer to 16 and 17 year olds on school dropout rates is of general policy interest to policy makers worldwide. The authors find that the impact of the subsidy is quite substantial, especially for those who receive the maximum payment. The subsidy increases the initial education participation of eligible males by 4.8 percentage points and eligible females by 4.2 percentage points. In the second year this increases to 7.6 percentage points for eligible males and 5.3 percentage points for females, suggesting that the effect of the policy is not only to increase participation, but also retention in full-time education. The initial effects are largest for those who receive the maximum payment although the retention effects are concentrated among individuals who are only partially eligible. The authors estimate that just over half of individuals who stayed in education were drawn from inactivity rather than work. The overall impact of the Education Maintenance Allowance (EMA) was not diminished when it was paid to the mother rather than to the child, though there is some weak evidence that paying to the child is more effective for those fully eligible whereas the opposite is true for those who are partially eligible. The authors also find that the effect of EMA is largest for children coming from a poorer socio-economic background. Both girls and boys coming from low-income families who qualify for the full EMA payment have very high drop out rates and the EMA has proved especially effective in plugging the dropout gap for this vulnerable group. Appended are: (1) Indicators used in each deprivation score; (2) Sample characteristics; (3) Covariate balancing indicators (best specification): before and after matching; (4) Attrition between wave 1 and wave 2; and (5) Identifying assumptions and Estimation method. (Contains 9 tables and 38 footnotes.)

In this analysis we seek to shed light on the extent to which credit constraints may affect individuals' choices to stay in full-time education past the age of 16 and to complete higher education (HE) qualifications in the United Kingdom, and on how this has varied between individuals born in 1958 and in 1970. The observed correlation between family income and educational outcomes can be interpreted as arising from two quite distinct sources: (1) short-run credit constraints, whereby a limited access to credit markets means that the costs of funds are higher for children of low-income families; (2) long-run family background and environmental effects, which produce both cognitive and non-cognitive ability and also mould children's expectations and tastes for education, all of which crucially affects schooling choices and outcomes. The aim of the analysis is to separate out the pure effect on schooling of short-term income constraints from longer term family income and background influences. We apply to the UK the procedure of Heckman and Carneiro (2003), aimed at estimating the share of individuals who are not staying on or who are not attaining an HE qualification because of short-term "credit constraints". The share of the population being "credit constrained" in their educational choices is defined as any residual gap that remains in the educational participation rates of individuals whose families are in the lower three quartiles of the parental income distribution compared to individuals in the top quartile (who are, by definition, not credit constrained), once having controlled for a number of observed measures of early family and environmental influences. Note that to the extent to which we were unable to proxy all those early and background long-run factors related to growing up in a family in the top income quartile that also affect educational outcomes, our estimates represent an "upper bound" on the share of individuals truly facing short-run credit constraints. Especially in the light of this caveat, overall our results do not seem to point to particularly large fragments of the population being credit constrained in their educational choices, although we found evidence that the importance of short-term credit constraints on the staying-on decision has increased for the younger cohort. As to the decision of whether to stay in full-time education past the age of 16, we found no evidence of credit constraints for individuals born in 1958. By the time the 1970 cohort was making this decision some 12 years later in 1986, however, this situation had changed, particularly for individuals in the top and bottom ability tertiles. In particular, around a 7 percentage point gap in staying-on rates remains between individuals coming from families in the top income quartile and those from the bottom three quartiles. As to the importance of credit constraints in terms of HE attainment decisions, we find that for males, such constraints seem to have surfaced between the two cohorts, though the share of the younger cohort being affected remains fairly minor (2-3%). By contrast, females of both cohorts seem to have been affected by credit constraints in roughly equal measure (3-6%). Subject to the proviso that we have no way to gauge if and how these patterns have evolved from the mid 1980s to today, our findings seem to suggest that policies aimed at reducing the possible impact of short-run credit constraints on education decisions should target individuals at the age of 16 (or possibly earlier) when they are making decisions about whether or not to continue in full-time education (e.g. like the Education Maintenance Allowances programme), rather than at 18 when individuals are making Higher Education decisions. Appended are: (1) BCS Credit Constraint Regression Results; and (2) NCDS: Proportion staying on and attaining HE by parental income quartiles. (Contains 1 box, 8 figures, 6 tables and 11 footnotes.)

When looking at the relationship between individual earnings and schooling, there are potential sources of bias which arise due to individual education choices; individuals of higher unobserved ability or with higher unobserved payoffs from schooling may for instance invest more in education. This paper reviews alternative models and estimation methods meant to overcome these sources of bias and to thus recover the true causal effect of education on earnings. As to the specification of the model, the paper highlights the distinction between models which focus on the impact of a specific educational level, such as undertaking higher education compared to not doing so (single-treatment models), and models which allow for a number of sequential levels of schooling (multiple-treatment models). The latter framework is particularly attractive when interest lies in a wide range of educational qualifications with potentially very different returns. A second crucial choice as to model specification concerns the nature of the returns to education, in particular whether to allow returns to vary across individuals for the same educational qualification (homogeneous versus heterogeneous returns models). Once heterogeneity in returns is allowed, it becomes crucial to define the subpopulation for whom one is interested in estimating returns. The authors first provide a methodological comparison of four main estimation methods: least squares, matching methods, instrumental variable methods and control function methods. For the different model specifications, the paper highlights the assumptions needed for the validity of each method and investigates the estimators' properties. In particular, whilst the feasibility of these alternative methods clearly hinges on the nature of the available data, their implementation and properties differ according to whether the model is one of homogeneous or heterogeneous returns and whether education is represented through a single or a multiple measure. Appended are: (1) Summary statistics; (2) Classification of educational qualifications; (3) Covariate balancing indicators before and after matching (best specification); and (4) Difference in returns for the no-qualifications group. (Contains 2 tables.)

The concept of social exclusion has been widely debated in Europe, though there has been little discussion of its application to children. This paper examines what is meant by exclusion of children, considering the choice of reference group, the geographical dimensions of exclusion, and the issue of who is responsible for any exclusion of children. It looks at social exclusion in the United Kingdom and in the European Union, then it goes on to discuss the use of the concept of exclusion in the United States, where in contrast to Europe, it has achieved little penetration to date. To assess whether there are grounds for discussion of social exclusion as it relates to children in the United States, the paper focuses on various features of U.S. society and institutions, including the measurement of poverty, analysis of children's living standards, state versus federal responsibilities, welfare reform, the emphasis on personal responsibility, and politics and the economy. (Contains 58 references.) (SM)

This study explored the relationships between adult economic outcomes and three key factors during adolescence: schooling, family background, and county of residence. The empirical analysis was based on data covering the period from 1979-1996. Data came from the 1979 National Longitudinal Survey of Youth. The study examined a sample of people ages 14-19 years in 1979. Researchers made estimates on the impact of family, school, and county when growing up on earnings capacity and poverty risk once participants reached adulthood. Overall, family, school, and county of residence, when analyzed separately, each exhibited significant associations with men's and women's outcomes in later life. The size and significance of these effects were very susceptible to controls for the other sets of background factors, indicating the strong link between these different aspects of people's lives when growing up. Family factors had the strongest explanatory power, followed by schooling variables. There was a strong correlation between the characteristics of area of residence and family and school. The results provide evidence that the advantage or disadvantage associated with family background is compounded by young people's experiences in school, and in some cases, area of residence. Tables are appended. (Contains 11 references.) (SM)

The new Labour Government in Britain has made the reduction of child poverty one of its central objectives. This paper describes the specific initiatives involved in Labour's approach and weighs them in terms of their potential impact. After setting out the extent of the problem of child poverty, the causes are discussed, and Britain's problem is set in an international perspective. The impact on child poverty of policies designed to raise incomes directly is analyzed using micro-simulation modeling. A major emphasis of current policy is on the promotion of paid work, and the paper explores the potential for poverty reduction of increasing the employment of parents. It finds that at its maximum, increasing paid work could roughly double the reduction in child poverty achieved by tax and benefit policies alone, a combined decrease of 1.85 million children in poverty. However, a more realistic forecast of increases in parental employment suggests that the number of children in poverty may be reduced by one million by 2002. The policies that address long-term disadvantage are also discussed, the whole program is assessed, and future strategy is considered. (Contains 26 references.) (SM)

In order to develop conclusions about future policy aimed at addressing the challenge of workers at risk because of low skills, the NEWSKILLS project combined scientific analysis with consultation with social partner representatives, policy analysis, and field work in firms. Population proportions in International Standard Classification of Education (ISCED) 0-2 group (those who had completed lower secondary or less education) varied widely among European countries. In all countries, the proportion of adults in the 0-2 group declined from 1985-95 resulting predominantly from more young people receiving further education and training. Adult upgrading from ISCED 0-2 remained the exception. Measured by duration, the low skill group received less employer-provided education and training than higher skill groups. The 0-2 group's labor market position declined over the same period relative to the national average. Technological change explained much of the decline in labor market demand for the group without further education and training. Older workers without full lower secondary education were at greatest risk. Increased expectations in social competence and communication resulting from growth of service economy employment was found. Suggestions were to frame education policy in terms of entitlement to a minimum level and not only to an entitlement of years of education. (Contains 73 references.) (YLB)

This document provides the appendices for the report entitled: "Teaching Excellence in the Disciplines." Based on interviews with deans from a range of UK universities, the main report produced by LSE Enterprise for the HEA, provides a snapshot of different conceptions of what constitutes good teaching practice at discipline level and exemplifies the challenges facing the architects of the Teaching Excellence Framework (TEF) and reviews the current literature base. This document contains the following appended information: (1) Methodology for selecting and analysing academic journals; (2) Disciplinary journals analysed; (3) Academic to vocational mappings; and (4) Interview schedule for senior faculty responsible for learning and teaching; (5) Information sheet and informed consent form; (6) Survey Questionnaire; and (7) Summary of statistical data.

This report provides key findings from a two part research project funded by the Sutton Trust and the London School of Economics & Political Science, (LSE) focusing on secondary school admissions in England. The research analyses secondary schools' admissions criteria and practices in England in 2012/13 and illustrative examples of how some local authorities and schools use pupil banding as part of the Year 7 admissions process. The report provides a brief overview of the historical and policy context relating to secondary school admissions, identifying in particular the latent concerns regarding academic selection persisting from the transition from a selective to a comprehensive system and during the period of the educational quasi-market since 1988. Previous research has suggested that a significant minority of secondary schools, and in particular those responsible for their own admissions, used a variety of oversubscription criteria that could be socially selective. Oversubscription criteria was examined used by 3,001 publicly-funded secondary schools in England. Findings relating to secondary school admissions for 2012/13 show that there have been some changes since 2008. Virtually all schools now give top priority to children in local authority care, in accordance with legislation. Most of the changes from 2008 to 2012 reflect an increase in the objectivity and transparency of oversubscription criteria. Key findings include the following: (1) The growth in the number of sponsored academies has not led to a corresponding increase in the use of selective oversubscription criteria; (2) Distance and sibling criteria remain the predominant oversubscription criteria for non-selective state schools; (3) There has been a slight increase in the number of schools that use partial selection by aptitude (from 133 schools (5%) to 155 schools (6%) between 2008 and 2012); (4) A minority of schools with a religious character do not use religious oversubscription criteria although most do use measures of religious adherence for admission; and (5) Grammar schools use a similar range of oversubscription criteria to non-selective schools although of course applicants must meet their initial entrance requirements (including tests of ability). Recommendations by Sutton Trust include the following: (1) More schools, particularly in urban areas, should take the opportunity where they are responsible for their own admissions to introduce random allocation (ballots) or banding to ensure that a wider mix of pupils has access to the most academically successful comprehensives; (2) The most effective use of banding is when cooperative agreement can be reached between schools in an area; (3) Schools that wish to achieve a comprehensive intake should use banding, or random allocation, in conjunction with a catchment area, as these admissions policies can help schools to achieve an intake reflecting a wide ability range; (4) Where banding is used, a common test should be developed for all schools in an area so that pupils don't have to sit multiple tests; (5) The Government should find ways--working with community groups, consumer agencies and businesses that are successful in working class communities--to make it easier for all parents to access as rich a range of information to facilitate informed choice-making over their children's education; and (6) It is particularly important that parents are aware not just of the school choices available, but of their rights to free transport to a choice of three schools within six miles of their home (or up to 15 miles for faith schools) if their child is eligible for free school meals. An appendix contains two additional tables.