Search

Pell grants are the largest financial aid vehicle in the United States, and yet, their role in shaping students' college choices is not clear. Drawing on the enrollment decisions of four cohorts of Tennessee high school graduates and quasi-experimental Pell eligibility derived from federal formulas, we find little evidence that marginal Pell eligibility affects whether or where students enroll in college. Inframarginal estimates suggest that students sort into colleges with 11.6 cents higher tuition per dollar of Pell aid, although other measures of college quality do not significantly improve over the counterfactual. An investigation into mechanisms that might be muting student responses to Pell favors the application process itself over grant size or institutional aid flexibility.

We exploit the unique features of high schools in Seoul to study the effects of school autonomy on student outcomes. Under South Korea's equalization policy, both private and public schools in Seoul admit students that are assigned randomly to them, receive equal government funding, charge identical fees, and use similar curricula. However, private schools have greater flexibility in personnel decisions, and their principals and teachers face stronger incentives to perform. We find that private high schools have better student outcomes than public high schools. Our results suggest that autonomy in personnel decisions explains the positive student outcomes in private schools.

This paper derives optimal income tax and human capital policies in a dynamic life cycle model of labor supply and risky human capital formation. The wage is a function of both stochastic, persistent, and exogenous "ability'' and endogenous human capital. Human capital is acquired throughout life through monetary expenses. The government faces asymmetric information regarding the initial ability of agents and the lifetime evolution of ability, as well as the labor supply. The optimal subsidy on human capital expenses is determined by three considerations: counterbalancing distortions to human capital investment from the taxation of wage and capital income, encouraging labor supply, and providing insurance against adverse draws from the productivity distribution. When the wage elasticity with respect to ability is increasing in human capital, the optimal subsidy involves less than full deductibility of human capital expenses on the tax base, and falls with age. I consider two ways to implement the optimum: income contingent loans, and a tax scheme that allows for a deferred deductibility of human capital expenses. Numerical results are presented that suggest that full dynamic risk-adjusted deductibility of expenses might be close to optimal, and that simple linear age-dependent policies can achieve most of the welfare gain from the second best.

Following the example of the Kalamazoo Promise initiated in 2005, place-based "Promise'' scholarship programs have proliferated over the past 8 years. These programs guarantee money towards the costs of attendance at selected colleges and universities provided that a student has resided and attended school within a particular public school district continuously for at least the four years prior to graduation. While some early programs have been studied in isolation, the impact of such programs in general is not well understood. In addition, although there is substantial and controversial variation from the original program's design, there is no direct evidence on how outcomes vary along with these design choices. We use a difference-in-difference approach to compare the evolution of both school enrollments and residential real estate prices around the announcement of these programs within the affected Promise zone and in the surrounding area. Taken together, our estimates suggest that these scholarships have important distributional effects that bear further examination. In particular, while estimates indicate that public school enrollments increase in Promise zones relative to their surrounding areas following Promise announcements, schools associated with merit-based programs experience increases in white enrollment and decreases in non-white enrollment. Furthermore, housing price effects are larger in neighborhoods with high quality schools and in the upper half of the housing price distribution, suggesting higher valuation by high-income households. These patterns lead us to conclude that such scholarships are primarily affecting the behavior of households living above the median income for whom they present the greatest value and that merit-based versions disproportionately impact white households.

Does limited access to credit explain some of the gap in schooling attainment between children from richer and poorer families? I present new evidence on this important question using data from two loan programs for college students in Chile. Both programs offer loans to students who score above a threshold on the national college admission test, enabling a regression discontinuity evaluation design. I find that students who score just above the cutoff have nearly 20 percentage points higher enrollment in first, second and third year than students who score just below, which represent relative increases of 100% , 213% and 446% respectively. More importantly, access to the loan program effectively eliminates the family income gradient in enrollment among students with similar test scores.

This paper examines whether university endowment managers think only in terms of the assets they manage or also take into account background income, that is, the other flows of income to the university. Specifically, we test whether the level and variability of a university's background income (e.g., from tuition and government grants) affect its endowment's allocations to so-called alternative assets, such as hedge funds, private equity, and venture capital. We find that both the probability of investing in alternative assets and the proportion of the portfolio invested in such assets increase with expected background income and decrease with its variability.

"This paper analyzes the relative importance of short term financial constraints vis a vis skills and other background factors affecting schooling decisions when explaining access to higher education in Peru. We focus on college access disparities between rich and poor households. We use a novel household survey that includes special tests to measure cognitive and non-cognitive skills of the urban population age 14-50. These are complemented with retrospective data on basic education and family socioeconomic conditions in a multinomial model. We find that strong correlation between college enrollment and family income in urban Peru is not only driven by credit constraints, but also by poor college readiness in terms of cognitive skills and by poor family and educational backgrounds affecting preferences for schooling. Family income explains, at most, half of the college access gap between poor and non-poor households. The other half is related to differences in parental education, educational background and cognitive skills. Our results indicate that credit and/or scholarship schemes alone will not suffice to change the regressive nature of higher education enrollment in Peru, and that such programs will face strong equity-efficiency trade-offs."

Public investments in repairs, modernization, and construction of schools cost billions. However, little is known about the nature of school facility investments, whether it actually changes the physical condition of public schools, and the subsequent causal impacts on student achievement. We study the achievement effects of nearly 1,400 capital campaigns initiated and financed by local school districts, comparing districts where school capital bonds were either narrowly approved or defeated by district voters. Overall, we find little evidence that school capital campaigns improve student achievement. Our event-study analyses focusing on students that attend targeted schools and therefore exposed to major campus renovations also generate very precise zero estimates of achievement effects. Thus, locally financed school capital campaigns – the predominant method through which facility investments are made – may represent a limited tool for realizing substantial gains in student achievement or closing achievement gaps.

We use data on workers in the largest public-sector occupation in the United States – teaching – to examine the effect of pension enhancements on employee retention. Specifically, we study a 1999 enhancement to the pension formula for public school teachers in St. Louis that discretely and dramatically increased their incentives to remain in covered employment. The St. Louis enhancement is substantively similar to enhancements that occurred in other state and municipal pension plans across the United States in the late 1990s and early 2000s. To identify the effect of the enhancement on teacher retention, we leverage the fact that the strength of the incentive increase varied across the workforce depending on how far teachers were from retirement eligibility when it was enacted. The retention incentives for late-career teachers were increased the most by the enhancement but their behavioral response was modest. A cost-benefit analysis indicates that the pension enhancement was not a cost-effective way to improve employee retention

This paper uses staggered bank branching deregulation across states in the United States to examine the impact of the resulting increase in the supply of credit on college enrollment from the 70s to early 90s. A significant advantage of our research design is that it produces estimates that are not confounded by wealth effects. We find that lifting branching restrictions raises college enrollment by about 2 percentage points (4%). Our results rule out alternative interpretations to the credit constraints channel. First, the effects are largest for low and middle income families, while insignificant for upper income families as well as bankrupt families who would have been unaffected by the increased access to private credit. Second, the effect of lifting branching restrictions subsided immediately following periods of increased loan limit through government student loan programs. We also show that household educational borrowing increased as a result of lifting branching restrictions. Our results provide novel evidence that credit constraints play an important role in determining household college enrollment decisions in the United States.

The technology of cognitive and non-cognitive skills formation is characterized by the cumulative nature of learning processes and by the presence of significant complementarities and irreversibilities in the acquisition of such skills. From this it follows that, in order to evaluate the quality of individual phases of skills formation, it is necessary to take account of the quality of the human capital entering the training process. It is evident that this aspect is more important, the more advanced the level of education. This paper evaluates the effects of the quality of Italian matriculants at 24 engineering faculties measured with the results of a standardized test on the regularity of university studies. The preliminary results confirm that failing to take account of the incoming quality of students may give rise to significant distortions in the evaluation of the academic productivity of universities. Meritocratic criteria in the allocation of public funds among schools and universities which do not take account of these considerations, in the absence of effective means to support the right to study (especially in the form of grants) would exacerbate the polarization of the educational systems and penalize the less mobile and more talented students. The same outcome can be generated by a misuse of university rankings based on unadjusted performance measures.

How does the rate at which firms adopt new technologies affect the level of education and training of a country's workforce? If technological change makes knowledge obsolete and tends to foster general rather than firm-specific skills, what would be the optimum level of education spending in front of a faster arrival of new technologies? This paper tries to answer these questions by developing an endogenous growth model with creative 'wear and tear' in which general education enhances innovation through R&D and lowers adjustment costs to new technologies, while on-the-job training is necessary for firms to realise their profit potentials by implementing the new technologies and reap all the related future quasi-rents. The paper reproduces some stylized facts on the technology-training relationship and shows how the optimum amount of time devoted to education and job training is affected by the rate of technical change itself. In particular, we find that a faster arrival of innovations shifts the private knowledge portfolio towards general human capital. We also find that households tend to under invest in education, thus leading to lower growth rates than technically feasible, and higher training costs than absolutely necessary. This suggests that there is room for education policy reducing private education fees.

Observers have expressed concern about growing inequality in resources across universities. But are universities really becoming more unequal? We argue that the typical approach of examining endowment growth alone is not sensible. In line with the literature on household inequality, we focus instead on a comprehensive income measure. We find that although there is considerable inequality among institutions, concerns about the inexorable growth of inequality are overblown. Whether one looks at income, endowment wealth, or expenditure, inequality has been high but stable, exhibiting only negligible increases in recent years. Furthermore, there has been little mobility within the higher education sector.

Parents often provide generous financial transfers to their adult children, perhaps assisting with college expenses, recognizing major life course events, or cushioning against negative financial shocks. Because resources are limited, a transfer made to one child likely affects transfers made to others in the family. Despite such possibilities, data limitations have led previous authors to focus almost exclusively on a single type of transfer made at a single point in time. Using data from the Health and Retirement Study, we examine the relationships among parental transfers for college and later cash transfers to all children within a family. We find that parents typically spend differentially on the postsecondary schooling of their children but find no evidence that this differential spending is offset by later cash transfers.

Public sector employees receive large fractions of their lifetime income in the form of deferred compensation. The introduction of the opportunity provided to Illinois public school employees to purchase additional pension benefits allows me to estimate employees' willingness-to-pay for benefits relative to the cost of providing them. The results show employees are willing to pay 20 cents on average for a dollar increase in the present value of expected retirement benefits. The findings suggest substantial inefficiency in compensation and cast doubt on the ability of deferred compensation schemes to attract employees. (JEL H75, I21, J26, J45)

We completely characterize the set of second-best optimal "menus" of student-loan contracts in a simple economy with risky labour-market outcomes, adverse selection, moral hazard and risk aversion. The model combines structured student loans and an elementary optimal income-tax problem à la Mirrlees. This combination can be called a graduate tax. There are two categories of second-best optima: the equal treatment and the separating allocations. The equal treatment case is obtained when the social weights of student types are close to their population frequencies; the expected utilities of different types are then equalized, conditional on the event of success on the labor market. But individuals are ex ante unequal because of differing probabilities of success, and ex post unequal, because the income tax trades off incentives and insurance (redistribution). In separating optima, the talented types bear more risk than the less-talented ones; they arise only if the social weight of the talented types is sufficiently high. The second-best optimal graduate tax provides incomplete insurance because of moral hazard; it typically involves cross-subsidies; generically, it cannot be decomposed as the sum of an optimal income tax depending only on earnings, and a loan repayment, depending only on education. Therefore, optimal loan repayments must be income-contingent.

This article explores whether two popular policy initiatives are compatible or conflicting strategies for enhancing educational equality in diverse large urban centers. These two initiatives are (1) charter school expansion and (2) improvement of resource equity across urban public school systems through policies often referred to as weighted student funding formulas. In this article, we focus on New York and Houston, two cities where districts have adopted initiatives to improve equity of the distribution of school site funding and have concurrently experienced significant expansion of charter schooling. We find that charter schools have the tendency to amplify student population differences across schools by disability, language, and low income status, and that charter schools’ access to financial resources varies widely. Nevertheless, we find that in very large urban districts like New York City, where charter market share remains small, the overall effects of charters on system-wide inequity remain small.

In this paper, we empirically investigate the relationship between international migration and education attainment levels. We ask whether rural children who live in households that experience migration or/and receiving remittances are more likely to complete school at a given age than children who live in non-migrant households. Higher secondary and higher education levels are examined separately. Our results clearly show that children in remittance-receiving households complete significantly more years of schooling. In particular, remittances increase the probability of a male child completing high school. However, the evidence suggests that the international migration lowers deeply the chances of children completing higher education. Evidence also indicates the utmost importance of households’ socio-economic status in determining to what extent the household mitigates the possible detrimental effects of migration on their children’s educational outcomes.

In an ongoing evaluation of post-secondary financial aid, we use random assignment to assess the causal effects of large privately-funded aid awards. Here, we compare the unbiased causal effect estimates from our RCT with two types of non-experimental econometric estimates. The first applies a selection-on-observables assumption in data from an earlier, nonrandomized cohort; the second uses a regression discontinuity design. Selection-on-observables methods generate estimates well below the experimental benchmark. Regression discontinuity estimates are similar to experimental estimates for students near the cutoff, but sensitive to controlling for the running variable, which is unusually coarse.

This paper finds households with children and elderly dependents, the “Sandwich Generation,” significantly reduce both college savings and stockholding. Having any elderly dependents decreases the probability of both stockholding and college savings by twice as much as poor personal health. Hence, these results have critical implications as they demonstrate the importance and magnitude of links between the pension system, college financial aid, and wealth accumulation. Elderly dependents limiting parental funds for offspring education can decrease offspring long-term earnings potential via decreased human capital accumulation. Furthermore, decreased stock holdings can decrease long-term wealth accumulation and thus intergenerational wealth transfers.

Rising student loan default rates and protests over debt suggest that many students make college enrollment and financing choices they regret. Policymakers have considered tying the availability of federally subsidized loans at degree programs to financial outcomes for past students. This paper considers the implementation of such a policy in Chile. We describe how loan repayment varied by degree type at baseline, the design of the loan reform, and how earnings-based loan caps change availability of loans and incentives for students and higher education institutions. We discuss the challenges facing policymakers seeking to link loan availability to earnings outcomes.

Previous work demonstrates that low-income higher achievers fail to apply to selective colleges despite their being admitted at high rates and receiving financial aid so generous that they pay less than at non-selective schools. The Expanding College Opportunities project, a randomized controlled trial, provides individualized information about colleges' net prices, resources, curricula, students, and outcomes. Our prior study shows that the intervention raises students' applications to, admissions at, enrollment, and progress at selective colleges. Here we use survey data to show that it actually changes students' knowledge and decision-making. We highlight topics on which they are misinformed.

In this paper, I investigate whether increases in public education expenditures lead to reductions in private school enrollment. In order to deal with the endogeneity of public expenditures, I use as a natural experiment the 1998 FUNDEF reform in Brazil that caused exogenous variations in local public school funding. Using data from Brazilian School and Population censuses, I show that public education expenditures increases are associated with reductions in the share of private school enrollment for grade 1. However, the effect is smaller for grades 2 to 4, which is consistent with the existence of costs associated with switching schools. Resume Depenses pour l'instruction publique et inscriptions dans les ecoles privees. Dans ce memoire, on fait enquete pour etablir si des accroissements dans les depenses pour l'instruction publique menent a des reductions dans les inscriptions dans les ecoles privees. Conscient de l’endogeneite des depenses publiques, l’auteur utilise la reforme FUNDEF de 1998 au Brazil, qui a entraine des variations exogenes dans le financement des ecoles publiques locales. A partir des donnees des recensements bresiliens des ecoles et de la population, on montre que les accroissements de depenses pour l'instruction publique sont associes a des reductions dans la part des ecoles privees dans les inscriptions en premiere annee. Cependant l’effet est plus faible pour les inscriptions dans les annees (2 a 4) qui suivent – ce qui est coherent avec l’existence de couts associes aux changements d’ecole.

The article analyzes the professional development of teachers Lithuania, proposed new form of teacher internships, teacher development concept, entrepreneurship. Professional training for teachers is required in order to update the teachers of local and national priorities and initiatives being; update their knowledge, understanding and skills in pedagogy, curriculum, use of new technologies in teaching areas. In addition, effective professional learning takes place when teachers work with each other to share practices and learn together. Effective professional training is when: it is a long-term and planned; it is clearly the results expected to be achieved in professional education; it is directly needed for a specific and important teacher, and / or school and takes into account the existing knowledge and experience; it is based on the experience of action and exploration; it is held in conjunction with others; it is based on the best available data on education and training, and is headed by experienced specialists.Keywords. Teacher, Teachers' Qualifications, Competence, Professional training, Professional development of teachers, Entrepreneurship education.JEL. I21, I22, I24.

Three tax credits benefit households who pay tuition and fees for higher education. The credits have been justified as an investment: generating more educated people and thus more earnings and externalities associated with education. The credits have also been justified purely as tax cuts to benefit the middle class. In 2009, the generosity of and eligibility for the tax credits expanded enormously so that their 2011 cost was $25 billion. Using selected, de-identified data from the population of potential filers, we show how the credits are distributed across households with different incomes. We estimate the causal effects of the federal tax credits using two empirical strategies (regression kink and simulated instruments) which we show to be strong and very credibly valid for this application. The latter strategy exploits the massive expansion of the credits in 2009. We present causal estimates of the credits' effects on postsecondary attendance, the type of college attended, the resources experienced in college, tuition paid, and financial aid received. We discuss the implications of our findings for society's return on investment and for the tax credits' budget neutrality over the long term (whether higher lifetime earnings generate sufficient taxes to recoup the tax expenditures). We assess several explanations why the credits appear to have negligible causal effects.

A társadalmi egyenlőtlenségek növekedése és a mobilitás csökkenése világszerte aggasztó tendenciákat mutat. Magyarországon a közoktatás szegényeket sújtó, feltűnően diszkriminatív jellege az elmúlt évtizedekben súlyos veszélybe sodorta a társadalmi mobilitást. A felsőoktatás-politika a belépést nehezítve (minimumpont-emelések, duális tandíjrendszer, tandíjemelések) és a teljesítményelvet túlhajszolva tovább súlyosbította a helyzetet, amit a Diákhitel-2 bevezetése sem tudott ellensúlyozni egy olyan környezetben, ahol az állam felsőoktatás-ellenes propagandát folytat, és közben drasztikusan csökkenti a finanszírozást. A hibás szabályozás miatt a többletpontok rendszere sem működik megfelelően. Mindezek miatt a halmozottan hátrányos helyzetű hallgatók felsőoktatás-beli részaránya felvételkor jelenleg fél százalék körül mozog, ami a gimnáziumi férőhelyek tervezett radikális szűkítése miatt várhatóan el fogja érni az abszolút nulla szintet. A tanulmányban bemutatunk egy általunk indított civil kezdeményezést, a Híd a felsőoktatásba elnevezésű programot, amelynek célja, hogy segítséget nyújtson a hátrányos helyzetű, főként roma középiskolásoknak a sikeres egyetemi felvételihez és a diploma megszerzéséhez. A fő tanulság: viszonylag kevés pénzből és rövid idő alatt még akkor is lehet eredményeket elérni, ha az általános társadalmi és politikai környezet egyáltalán nem támogató.* Journal of Economic Literature (JEL) kód: I22, I24., Tendencies to increasing inequality and decreasing social mobility can be seen worldwide. Social mobility in Hungary has been seriously endangered by strong discrimination against the poor in the school system. This is aggravated by higher education policy, which focuses on entry point, and by undue emphasis on secondary grades (raising admittance level, maintaining a dual tuition-fee system, raising tuition fees), and because the student loan system was unable to offset these effects in an environment where state propaganda plays down higher education and state financing is sharply reduced. Nor does positive discrimination work well due to inappropriate regulation. Thus the participation rate of the disadvantaged in higher education is around 0.5% (as opposed to 13% in elementary school), and likely to approach absolute zero if a planned radical cut in the number of secondary students occurs. The paper goes on to present a civil initiative (Bridge to Higher Education) aimed at helping Roma and other secondary students gain admission to university and obtain degrees. The conclusion is that results can be gained with a relatively low budget over a short period, even in an unfavorable social and political climate.

We examine behavioral responses to an incentive program that offers high-performing teachers in ten school districts across the country $20,000 to transfer into the district's hardest-to-staff schools. We discuss behavioral responses to the program on high-performing teachers’ willingness to transfer (supply) and the effect of the transfer offer on the internal dynamics of the receiving schools (demand). We found low take-up rates among the 1,514 high-performing teachers who were offered the incentive, with minimal sorting on observable characteristics. Within the new schools, transfer teachers were less likely than their counterparts in a randomized control group to require mentoring and more likely to provide mentoring themselves. No significant differences occurred in school climate, collegiality, or the way in which students were assigned to teachers, but evidence indicates that principals may have strategically assigned existing teachers to grades in both treatment and control schools in response to the quality of the incoming teachers.

Chicago Public Schools initiated the Excellence in Teaching Project, a teacher evaluation program designed to increase student learning by improving classroom instruction through structured principal–teacher dialogue. The pilot began in forty-four elementary schools in 2008–09 (cohort 1) and scaled up to include an additional forty-eight elementary schools in 2009–10 (cohort 2). Leveraging the experimental design of the rollout, cohort 1 schools performed better in reading and math than cohort 2 schools at the end of the first year, though the math effects are not statistically significant. We find the initial improvement for cohort 1 schools remains even after cohort 2 schools adopted the program. Moreover, the pilot differentially impacted schools with different characteristics. Higher-achieving and lower-poverty schools were the primary beneficiaries, suggesting the intervention was most successful in more advantaged schools. These findings are relevant for policy makers and school leaders who are implementing evaluation systems that incorporate classroom observations.

The school is one of the bedrocks of the citizens' development of any country, a reference system for future generations, but the importance given to the educational system varies from country to country, depending on each country's policy on funding and taxing the education. Our analysis emphasizes theoretically and with practical examples the calculation of payroll in Romanian pre- university education and the position of our country within the European Union in this field. We have noticed that Romania, in the framework of pre-university education among E.U. countries, is ranked in last place in terms of funding the education system, and in terms of remunerating teachers, having a reduced payroll tax compared to the analysed EU countries, because of the 16% flat tax applied in our country. We believe that an increase in investments in the Romanian pre-university education, by increasing teachers' wage and ensuring an efficient management of the education system, are factors likely to contribute to the sustainable development of Romanian education in terms of performance and international competitiveness.

Gary Fethke and Andrew Policano's book Public No More: A New Path to Excellence for America's Public Universities paints a picture of a future for public research universities that is very different than what many people will want to see. Their message is that the financial and governance models under which public universities have operated have broken down and that new models are required. While I do not always agree with their prescriptions, I argue that private research universities face many of the same issues as their public counterparts and that this book deserves to be widely read by all people concerned with the future of American higher education. (JEL H75, I22, I23, I28)

We characterize optimal redistribution in a dynastic economy with observable human capital and hidden ability. We show that the wedge between human capital investment in the laissez faire and the social optimum differs from the wedge for bequests because (i) returns to human capital are risky, and (ii) human capital may change informational rents. We compute the optimal allocation when ability is persistent across generations, as calibrated for the U.S. We show how the allocation can be implemented with student loans featuring contingent repayments. The quantitative results reveal that human capital investment should (i) increase in parental income because of ability transmission across generations, but (ii) decrease in inherited assets because of the negative effect of wealth on labor supply.

New York’s School Tax Relief Program, STAR, provides state-funded property tax relief for homeowners. Like a matching grant, STAR changes the price of education, thereby altering the incentives of voters and school officials and leading to unintended consequences. Using data for New York State school districts before and after STAR was implemented, we find that STAR increased student performance, school district inefficiency, and school spending by 2 to 4 percent in most districts, leading to an average school property tax rate increase of 14 percent. The STAR-induced tax rate increases offset about one third of the initial STAR tax savings and boosted property taxes for business property. STAR did little to offset the existing inequities in New York State’s education finance system, particularly compared to an equal-cost increase in state aid. This article should be of interest to policy makers involved in property taxes or other aspects of education finance. © 2014 Federal Reserve Bank of New York

We consider issues of equality and efficiency in two different school funding systems -- a state-level system in Michigan and a foundation system in Ohio. Unlike Ohio, the Michigan system restricts districts from generating property or income tax revenue to fund operating expenditures. In both states, districts fund capital expenditures with local tax revenue. Our results indicate that although average revenue and expenditures per pupil in Michigan and Ohio are almost identical, the distributions of the various revenue sources are quite different. Ohio’s funding system has greater equality in terms of total revenue, largely due to Ohio redistributing state funds to the least wealthy districts while Michigan does not. We find relatively wealthy Michigan districts spend more on capital expenditures, whereas relatively wealthy Ohio districts spend more on labor and materials. This suggests that constraints on raising local revenue to fund operating expenditures in Michigan could create efficiency issues. © 2014 Federal Reserve Bank of New York

We examine changes in the use of nontax revenues for education finance from 1991 to 2010. Beyond the summary of usage over time, we ask whether nontraditional revenues like fees accentuate or mitigate the impact of downturns. More generally, we examine the extent to which school districts have responded to fiscal pressures by turning to nontax revenues. We also document the extent to which the use of nontax revenues varies across districts according to student poverty status. We show that alternative revenues continue to be a small source of local revenues and have increased quite little since the early 1990s. There was at most a minimal shift to nontax revenues in downturns, though there is evidence of greater use of these revenues among school districts facing more permanent fiscal pressures like tax limits. Differential access to fee revenues and other alternative revenues during downturns may slightly accentuate inequities in K–12 education spending. © 2014 Federal Reserve Bank of New York

We analyze a Massachusetts merit aid program that gives high-scoring students tuition waivers at in-state public colleges with lower graduation rates than available alternative colleges. A regression discontinuity design comparing students just above and below the eligibility threshold finds that students are remarkably willing to forgo college quality and that scholarship use actually lowered college completion rates. These results suggest that college quality affects college completion rates. The theoretical prediction that in-kind subsidies of public institutions can reduce consumption of the subsidized good is shown to be empirically important. (JEL H75, I22, I23, I28)

This paper examines voluntary contributions to public education via charitable school foundations, booster clubs and PTAs/PTOs as an alternative to local revenues generated via the property tax. We employ panel data on school-supporting charities with national coverage from 1995 to 2010, which we geocode and match to school districts. We first document the meteoric rise of school-supporting nonprofits during this panel, and then estimate a series of regression models including both reduced form and fixed effects specifications to examine the distributional consequences of voluntary contributions. We find that relatively large districts have higher probabilities of receiving revenues from a school-supporting nonprofit, but that the level of per-pupil voluntary contributions declines with student enrollment. In addition, we find that school districts with higher endowments — as measured by property tax revenues per pupil, the share of individuals with a bachelor’s degree or more, median household income, and relatively low unemployment rates — have higher probabilities of being served by at least one school-supporting nonprofit and higher levels of per-pupil contributions. Finally, we find no evidence that impressive recent growth in the number and financial size of these school supporting charities relates to reductions in the public financing of schools. Instead, we find that school districts that generate higher revenues from federal and property tax sources also generate higher revenues from voluntary contributions.

This study presents an overlapping-generations model with altruism towards children. We characterize a Markov-perfect political equilibrium of voting over two policy issues, public education for the young and social security for the old. The model potentially generates two types of political equilibria, one favoring public education and the other favoring social security. One equilibrium is selected by the government to maximize its objective. It is shown that (i) longevity affects equilibrium selection and relevant policy choices; and (ii) private education as an alternative to public education and a Markov-perfect political equilibrium can gen- erate the two types of equilibria.

This paper quantifies the extent to which unified teacher pay scales and differential alternatives produce opportunity costs that are asymmetric in math and verbal skills. Data from the Baccalaureate and Beyond 1997 and 2003 follow-ups are used to estimate a fully parametric, selection-corrected wage equation for nonteachers, which is then used to predict the wages that teachers would have received in a nonteaching career. The difference between actual teacher salaries and this prediction can be considered the opportunity cost of teaching. Moving up one standard deviation in math SAT score increases the opportunity cost of teaching by $1,500 to $2,000 four years after college, rising to $3,000 to $3,800 ten years after college. Moving up one standard deviation in verbal SAT score increases the opportunity cost by $300 four years after college, and by $1,300 ten years after college. The teacher salary gap is also decomposed into policy versus teacher-characteristic components. © 2014 Association for Education Finance and Policy

Researchers have good data on teachers' annual salaries but a hazy understanding of teachersÕ hours of work. This makes it difficult to calculate an accurate hourly wage and leads policy makers to default to anecdote rather than fact when debating teacher pay. Using data from the American Time Use Survey, I find that teachers work an average of 34.5 hours per week on an annual basis (38.0 hours per week during the school year and 21.5 hours per week during the summer months). I find that when hours per week are accurately accounted for high school teachers earn in the range of 7Ð14 percent less than demographically similar workers in other occupations. However, elementary, middle, and special education teachers earn higher wages than demographically similar workers in other occupations. © 2014 Association for Education Finance and Policy

People with a high level of financial literacy represent a premise for the societies' evolution and wellbeing, because informed citizens are capable to manage their money, to take proper financial decisions and to contribute to general prosperity and financial stability. We analysed the ideological acceptations of the basic concepts and the methodology of measuring financial literacy. The paper emphasizes on the problem of low financial literacy across countries. This problem could be solved by developing a national strategy of financial education that is the premise for efficient financial education.

During the late 1990s public pension funds across the United States accrued large actuarial surpluses. The seemingly flush conditions of the pension funds led legislators in most states to substantially improve retirement benefits for public workers, including teachers. In this study we examine the benefit enhancements to the teacher pension system in Missouri. The enhancements resulted in large windfall gains for teachers who were close to retirement when the legislation was enacted. By contrast, novice teachers, and teachers who had not yet entered the labor force, were made worse off. The reason is that front-end contribution rates have been raised for current teachers to offset past liabilities accrued from the enhancements. Total teacher retirement compensation, net of contribution costs, is lower for young teachers today as a result of the enhancement legislation. Given sharp increases in pension costs in other states, this finding may generalize to young teachers in many other plans. © 2014 Association for Education Finance and Policy

Financial literacy and the need to improve it are getting more attention as a result of the economic crisis. The effectiveness of the programmes that target the improvement of financial literacy depends on knowing what factors influence people’s financial knowledge. This is exactly the reason why, using the data of the Financial Literacy Research Programme coordinated by the State Audit Office of Hungary, we investigated how the different demographic and educational features of students studying in higher education influence their financial literacy. Our results show that the financial knowledge of young people exhibit significant differences according to the measured criteria. Males, older people, people with a higher income and young people whose income is covered by their family only to a small extent are typically characterised by more advanced financial literacy. The results demonstrate that the financial-economic knowledge acquired in higher education has a beneficial impact on the financial knowledge of young people; on the other hand, the type of training and studies does not have any significant effect. Our analyses also revealed that the teaching of financial-economic topics in secondary school does not have any influence on the level of young people’s financial knowledge. The students participating in the study performed better in answering theoretical questions than in the case of practical questions. It is also true of theoretical and practical financial knowledge that males, older people, those who pursue economic studies or who are attend these kinds of courses at university know more about financial matters. At the same time, there are certain differences too. Income and its ratio which comes from the family show a significant correlation only in connection with practical knowledge, while as far as economic training is concerned in secondary schools, we can establish that it exerts a significant – positive – influence only on theoretical knowledge. When examining the educational criteria we found that the economic nature of the training correlates significantly with practical knowledge, while the number of semesters spent on studying subjects related to economics has a stronger positive influence on theoretical knowledge. The results reveal the need for a reform in the teaching of financial-economic knowledge and the introduction of programmes that can generate interest in financial matters.

We created a theoretical model of the main factors that influence household savings based on our secondary research, then conducted a questionnaire survey involving 4106 Hungarian households in the scope of primary research. The examined households had a low level of financial knowledge. They believe that financial literacy needs to be developed, since in general it is true that they are not adequately familiar with the various financial services and state aid options related to them. We came to the conclusion that households clearly believe that developing financial culture among the Hungarian population is of key importance. Four household types were distinguished from each other: 1. “Wishing to provide for themselves”: Their knowledge of savings products is above average, and they also try to take advantage of various tax allowances to a moderate degree. 2. “Lives for today”: They are least familiar with the various savings options. Exploiting State tax incentives is of no interest to them. 3. “Conscious and financially literate self-provider”: They are most open to State influence through tax breaks when making savings decisions. 4. “Self-provider, with no financial knowledge”: Although they are not familiar with the various financial options, they seek to take advantage of tax benefits as broadly as possible. All four household types believe that the primary focus should be on the education of vocational and high school students. Developing the adult population’s know-how should also be treated as a priority, but improving the financial literacy of primary school pupils is also considered necessary.

I investigate a possible unintended consequence of Proposition 2½ override behavior -- that it led to increased segregation in school districts in Massachusetts. This can occur because richer, low-minority towns tend to have more successful override votes that attract similar households with relatively high demands for public services who can afford to pay for them. To evaluate this hypothesis, I collect panel data on override behavior from 1982 to 2012 and merge this with data on school district enrollments and other district- and town-level characteristics. I find evidence that passing overrides earmarked for schools results in a significant decrease in the percent of nonwhite students enrolled in Massachusetts school districts. This happens in districts with below-average nonwhite school enrollments, and hence increases segregation. © 2014 Federal Reserve Bank of New York

School districts throughout the United States are increasingly providing greater autonomy to local public (non-charter) school principals. In 2005–06, Chicago Public Schools initiated the Autonomous Management and Performance Schools program, granting academic, programmatic, and operational freedoms to select principals. This paper provides evidence on how school leaders used their new autonomy and its impact on school performance. Findings suggest that principals were more likely to exercise autonomy over the school budget and curricular/instructional strategies than over professional development and the school's calendar/schedule. Utilizing regression discontinuity methods, I find that receipt of greater autonomy had no statistically significant impact on a school's average math or reading achievement after two years of autonomy. I do find evidence that autonomy positively affected reading proficiency rates at the end of the second year of autonomy. These findings are particularly relevant for policy makers considering the provision of greater school-based autonomy in their local school districts. © 2014 Association for Education Finance and Policy

We study the effects of private school competition on public school students' test scores in the wake of Florida's Corporate Tax Credit Scholarship program, now known as the Florida Tax Credit Scholarship Program, which offered scholarships to eligible low-income students to attend private schools. Specifically, we examine whether students in schools that were exposed to a more competitive private school landscape saw greater improvements in their test scores after the introduction of the scholarship program, than did students in schools that faced less competition. The degree of competition is characterized by several geocoded variables that capture students' ease of access to private schools, and the variety of nearby private school options open to students. We find that greater degrees of competition are associated with greater improvements in students' test scores following the introduction of the program; these findings are robust to the different variables we use to define competition. These findings are not an artifact of pre-policy trends; the degree of competition from nearby private schools matters only after the announcement of the new program, which makes nearby private competitors more affordable for eligible students. We also test for several moderating factors, and find that schools that we would expect to be most sensitive to competitive pressure see larger improvements in their test scores as a result of increased competition.

During the Great Recession and its aftermath, state and local governments’ revenue streams dried up due to diminished taxes. Budget cuts affected many aspects of government; in this paper, we investigate whether (and how) local school districts modified their funding and taxing decisions in response to changes in state aid in the post-recession period. Using detailed district-level panel data from New York and a fixed effects as well as an instrumental variables strategy, we find strong evidence that school districts did indeed respond to state aid cuts in the post-recession period by countering the cuts. In comparison with the pre-recession period, a unit decrease in state aid was associated with a relative increase in local funding per pupil. To further probe the school district role, we explore whether the property tax rate, which districts set each year in response to budgetary needs, also responded to state aid cuts. Indeed, we find that relative to the pre-recession period, the post-recession period was characterized by a strong negative relationship between the property tax rate and state aid per pupil. In other words, after the recession a unit decrease in state aid was associated with a relative increase in the property tax rate in the post-recession period (in comparison with the pre-recession period).

In the academic and policy debates over the merits of charter schools, two things are clear: First, they are here to stay and, second, their quality varies widely. Policy makers therefore need to understand how to design charter laws that promote the creation of high-performing schools. Crucial to this discussion is the charter authorizing process, which varies across the nation. In some states, authorizing power is held exclusively by local school districts, whereas other states allow a range of authorizers that may include not only local districts, but also nonprofit organizations, counties, higher educational institutions, or a state agency. In this paper we use individual student-level data from Ohio, which permits a wide range of organizations to authorize charter schools, to examine the relationship between type of authorizer and charter-school effectiveness as measured by students’ achievement trajectories. © 2014 Association for Education Finance and Policy

Today, when the national academic education system is chronically underfinanced, the universities must identify, more than ever, in addition to their current resources, other funding sources that will contribute at reaching the assumed missions. A significant funding source is represented by the EU funds. Starting with the 4th trimester of 2013, the universities can use the mechanism of settlement for payment requests, as public beneficiaries that implement projects financed from structural funds. The paper focuses on the implementation of the payment requests mechanism by the public universities and presents itself as an applicative study through which we will highlight its methodology and steps, together with the accounting representation of its application, taking as landmark the University of Craiova. We considered mainly aspects related to the interpretation of the applicable referential in connection with its practical application, meaning the accounting valorization of the financing facilitated by the application of the mechanism.