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espanolLa incorporacion de la heterogeneidad del estudiante en el analisis, las diferencias en la calidad de la educacion y en la probabilidad de repitencia, tipicas en los paises en desarrollo, marca la diferencia entre una inversion en educacion atractiva y otra inconveniente. La metodologia asocia la calidad educacional y las tasas de repitencia con los retornos a la educacion. En particular, parece evidente que menos educacion secundaria, en el caso de Uruguay, es una inversion inconveniente para los estudiantes con desventajas, aun no teniendo en cuenta la posibilidad de que dichos alumnos no puedan afrontar los costos de oportunidad, hecho que probablemente tambien explica la fuerte desercion de este tipo de estudiantes en muchos paises en desarrollo. EnglishThis paper shows that when student heterogeneity is introduced in the analysis, differences in the quality of education and in the probability of repetition, typical in developing countries, mark the contrast between an attractive and an inconvenient investment in education. The methodology associates educational quality and repetition rates with educational returns. In particular, it makes apparent that lower secondary education, in the case of Uruguay, is an inconvenient investment for disadvantaged students, even disregarding the possibility of such students not being able to afford the opportunity costs, this fact probably also explains the heavy dropout rates of this student type in many developing countries.

The article analyses the general equilibrium effects of education as a user and producer of resources considering some features of the sector typical in developing countries, such as the presence of inefficiencies, in a model that nevertheless remains close to the Heckscher–Ohlin paradigm. Short- and long-term effects of education are considered and it is shown that the overall effects are linked to the efficiency with which endowments are produced. The analysis has implications for policymakers in developing countries with failing educational systems, as it suggests a relation between cost-effectiveness of policies and growth and not between enrolments and growth or between public expenditure in education and growth as it is usually tested in growth regressions.

The potential distributional effects of public education as a producer of endowments are discussed, taking into consideration the presence of systemic inefficiency in the sector, which is typical in developing economies. The analysis has implications for policymakers, as it suggests the following: a) not addressing the inefficiency in educational systems has a cost in terms of wage inequality, and b) the effects of trade may be mediated or even reversed by the orientation of the education policy. Copyright © 2010 John Wiley & Sons, Ltd.

This paper discusses the welfare effects of trade in a Heckscher-Ohlin model of trade with costs of adjustment. The paper analyses the efficiency and the distributional effects of eliminating a tariff in a formerly protected sector. The tariff can be eliminated at the onset or after a while. In case of postponing the elimination of the tariff, the government may pre-announce the policy change or may not do it and surprise the private sector. It is shown that while large adjustment costs reduce the efficiency gains from trade liberalisation, small to moderate adjustment costs may raise the efficiency gains from a pre-announced liberalisation. The (net) adjustment costs reduce the welfare gains and losses of owners of production factors from a sudden unanticipated liberalisation. The policy risk is partially shifted towards owners of firms. The distributional effects of trade liberalisations are more complex when the policy is pre-announced. The adjustment costs may increase the gains and losses of owners of the production factors, for small and moderate levels. Also, the announcement that the tariff will be eliminated affects the value of the firms, and when the adjustment cost are not high it may raise rather than reduce the value of the firms in the formerly protected sector.

Economy-wide losses occur due to sluggish factor adjustment: these notes focus on the role of training in economic restructuring, and provide a novel approach to assess the value of human resources management policies. As training raises mobility it speeds up reallocation, also with favourable distributional impacts; it is argued that these effects reveal the true value of training. Numerical exercises show that policies towards training incentives and preparedness can make a significant contribution towards faster economic growth and lower long term losses from sluggish adjustment. Also, the relevance of improving the too-frequent poor effectiveness of training programs is made apparent.

The figures show that in Uruguay there are not significant changes in the composition of employment by qualifications during the last decade, being the majority group those of medium skilled workers. Even when in the period there was a significant increment in employment, it was not exempt of significant fluctuations which affected differently qualification groups and activity sectors. From these data some long term policy recommendations arise, as courter cyclical policies for skill formation as well as a careful consideration of promoting sector-specific-skills for riskier sectors.

The paper argues that a comprehensive evaluation of education reform in particular in developing countries needs considering the triangle’ quality-quantity-equity of educational policies in the short, medium and long term in a broader context than the education system itself. There is no simple “recipe” for improving quality and internal and external efficiency in the public education system but some general results are found. Firstly, that the elasticity of the return of the reform is decreasing with the size of increased budget, making anti-economical the reliance on a reform consisting in more resources only to significantly improve the poor performance of the system. Indeed, very modest target set to improve the system performance, would require -without more sophisticated policies- huge increments in budget with a poor return. In this sense the paper investigate the capacity of focused policies to improve the productivity of the education expenditure, in particular toward basic education or the disadvantaged students. Secondly, the timing of the reform matters: most policies with very different return in the long term are almost undistinguishable by their short run merits, and policies that are more productive in the short term may be less convenient than competing alternatives in the longer term, so the actual policy may be influenced by the time horizon chosen by the policy makers. Thirdly, effects of the reform are accumulative, and to evaluate the reform by modest, in general, short run merits is myopic and may put the reform at risk of reversion or to deter future investment in the sector.

The ratio of skill to unskilled labour stocks in the economy is widely acknowledged to have an important role for development. Can education policy do anything to affect the evolution of this ratio? This paper shows that it can, and it also shows that the actual effect of education policy depends on the allocation rule of the budget across educational levels. The consideration of a stylised hierarchical education model allows us to develop analytical conditions under which the allocation rule favours the accumulation of skills. The analysis has implication for policy makers in developing countries, where skill formation is much needed, as it shows that observed allocation rules usually violate the maximisation condition by the assignment of higher than optimal resources to higher education.

Education as an investment has competitive investment assets to which is compared usually by the respective return rates, that crucially depend on institutional quality. High returns to education depend on education quality whereas returns to rent seeking are basically determined by the quality of economic institutions. To analyse the implications of these settings an extension of standard OLG models is designed to allow for rent seeking activities (when institutions are weak) as an alternative to invest in human capital, affecting long term growth. The analysis shows that in the long term the individual welfare maximising behaviour leads to stationary equilibrium where human capital accumulation stops: when rent seeking is present and/or individuals are impatience it is reached a long term equilibrium with lower levels of human capital. Then, the pursuit of individuals’ profits leads in the long term to an impoverished situation to individuals due to output level stagnation; from this, an immediate implication is that reducing incentives to rent seeking by enhancing institutional settings, becomes a close substitute to allocate more resources to education investment in the short term, an a more effective option in the long term.

The data analysis on education, institution and growth shed further light on the limitations to empirical research as well as provide patterns that may be a useful reference for it. Firstly, carrying out Cluster Analysis similar-country grouping is obtained, and unsurprisingly, it is shown that all “good” qualities tend to come together. The mapping so generated allows a visualization of “classes” and provides a more “structured” reference to interpret human capital and growth than standard (though with a loss of precision). Secondly, the internal analysis on education institutions using aggregated data on schools, staff, resources and practices from Pisa 2012, aids to link good education outcomes with “softer” variables (in comparison to more traditional factors as resources, socio-economic background, etc.); the external analysis explores externalities and interactions between education institutions and contextual settings. This analysis suggests stronger than expected links of learning outcomes to the economic environment, and weaker than expected impact of educational practices which seem to relay on rather more “native” elements for success, not considered in the analysis.