Posted Content•
The causal effect of education on earnings
TL;DR: This paper surveys the recent literature on the causal relationship between education and earnings and concludes that the average (or average marginal) return to education is not much below the estimate that emerges from a standard human capital earnings function fit by OLS.
Abstract: This paper surveys the recent literature on the causal relationship between education and earnings. I focus on four areas of work: theoretical and econometric advances in modelling the causal effect of education in the presence of heterogeneous returns to schooling; recent studies that use institutional aspects of the education system to form instrumental variables estimates of the return to schooling; recent studies of the earnings and schooling of twins; and recent attempts to explicitly model sources of heterogeneity in the returns to education. Consistent with earlier surveys of the literature, I conclude that the average (or average marginal) return to education is not much below the estimate that emerges from a standard human capital earnings function fit by OLS. Evidence from the latest studies of identical twins suggests a small upward "ability" bias -- on the order of 10%. A consistent finding among studies using instrumental variables based on institutional changes in the education system is that the estimated returns to schooling are 20-40% above the corresponding OLS estimates. Part of the explanation for this finding may be that marginal returns to schooling for certain subgroups -- particularly relatively disadvantaged groups with low education outcomes -- are higher than the average marginal returns to education in the population as a whole.
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TL;DR: In this paper, the authors argue that there is no trade-off between equity and efficiency at early ages of human development but there is a substantial tradeoff at later ages, and that later remediation of skill deficits acquired in early years is often ineffective.
Abstract: Trends in skill bias and greater turbulence in modern labor markets put wages and employment prospects of unskilled workers under pressure. Weak incentives to utilize and maintain skills over the life-cycle become manifest with the ageing of the population. Reinvention of human capital policies is required to avoid increasing welfare state dependency among the unskilled and to reduce inefficiencies in human capital formation. Policy makers should acknowledge strong dynamic complementarities in skill formation. Investments in the human capital of children should expand relative to investment in older workers. There is no trade-off between equity and efficiency at early ages of human development but there is a substantial trade-off at later ages. Later remediation of skill deficits acquired in early years is often ineffective. Active labor market and training policies should therefore be reformulated. Skill formation is impaired when the returns to skill formation are low due to low skill use and insufficient skill maintenance later on in life. High marginal tax rates and generous benefit systems reduce labor force participation rates and hours worked and thereby lower the utilization rate of human capital. Tax-benefit systems should be reconsidered as they increasingly redistribute resources from outsiders to insiders in labor markets which is both distortionary and inequitable. Early retirement and pension schemes should be made actuarially fairer as they entail strong incentives to retire early and human capital is thus written off too quickly.
12 citations
TL;DR: This paper examined the informational value of texts borrowers write when requesting funds in debt crowdfunding, and showed that text features can indeed explain and predict loan default, using both explanatory and predictive models.
Abstract: Peer-to-peer (P2P) lending, as a form of debt-based crowdfunding, has received much attention in the past several years. Text, in particular, is a prevalent feature but much less understood. While there have been some studies on the role of texts in this context, they consider text as a control variable, and use manual coded small samples. Our study is one of the first to use a scalable approach to examine the informational value of texts borrowers write when requesting funds in debt crowdfunding. We first examine data from exogenous events on Prosper.com, and show that investors indeed consider textual descriptions when investing. Then, we show that text features can indeed explain and predict loan default, using both explanatory and predictive models. Finally, we show that investors correctly interpret the informational value of some, but not all, features of texts. Our study points to opportunities for efficiency improvement not yet documented in the crowdfunding literature, and has implications for researchers, platform owners, and regulators.
12 citations
TL;DR: The strategy to educate around deprescribing emerged from the medicines optimisation work stream at the National Institute of Health Research (NIHR) Collaboration for Leadership in Applied Health Research and Care Northwest London (CLAHRC NWL), and it is argued that education about depresCribing should adopt both a ‘top down’ to include senior clinicians, and ‘bottom up” to include junior staff and students.
Abstract: In the editorial of this deprescribing themed issue, we began by recognising that deprescribing is not easy. For many clinicians, the decision to deprescribe is hampered by the lack of evidence for safe methods of deprescribing. We identified the need for education to support clinicians in their deprescribing endeavours. Here, we describe our strategy to educate around deprescribing, which emerged from the medicines optimisation work stream at the National Institute of Health Research (NIHR) Collaboration for Leadership in Applied Health Research and Care Northwest London (CLAHRC NWL). CLAHRC NWL is a research and implementation programme1 ,2 that uses the model for improvement3 as a central component of quality improvement (QI) initiatives. We contend that education about deprescribing should adopt both a ‘top down’ to include senior clinicians, and ‘bottom up’ to include junior staff and students. This is supported by a patient safety initiative that was found to be best facilitated by such a combination approach to change.4 We will focus on the latter (hereafter bottom-up approach): educating junior and undergraduate clinicians, so that they enter the workplace with the confidence and skill to at least consider the need for deprescribing both at the point of initial prescribing and when undertaking medication review. We are conscious that the term bottom-up approach can have a number of meanings, here we use it to refer to the capacity to lead to grass-roots changes that will grow and pervade practice, rather than ‘command and control’ regulations on actions.
The theory and practice of education are, at this level, andragogy (the education of adults), thus the principles of adult learning should be used;5 yet the evaluation techniques used for child education may prove useful for long-term assessments of change, for instance, those studies seeking to address differentials in earnings. …
12 citations
Dissertation•
01 Jan 2012
TL;DR: In this article, the authors examined both the material and subjective aspects of personal well-being in order to seek the implications of the post-crisis neoliberal restructuring for the general welfare of the Korean society in particular, and other neoliberal countries in general.
Abstract: Over the last three decades, the world has witnessed another fundamental institutional shift in the history of capitalist development. In the wake of the series of economic crises in the 1970s, the so-called neoliberalism and socioeconomic restructuring based on its tenets arose as a solution to the problems of stagflation and quickly spread across the globe thanks to its ideational and practical appeals. South Korea has not been an exception to the worldwide current of the neoliberal globalization and pursued the neoliberal restructuring since the early 1980s, but particularly actively after the 1997 Asian Financial Crisis. As a consequence of the comprehensive neoliberal structural adjustment based on free-market mechanisms, however, South Korea has experienced a substantial increase in inequality, poverty, and insecurity over the last decade or so. Against this context, I examine both the material and subjective aspects of personal well-being in order to seek the implications of the post-crisis neoliberal restructuring for the general welfare of the Korean society in particular, and other neoliberal countries in general. In the first substantive chapter, the association between education and rising earnings inequality in post-crisis South Korea is studied to measure how much of the increase in the post-crisis earnings inequality is due to diverging earnings returns to education. Second, the relationship between family wealth and household consumption is examined over the course of economic crisis and recovery in post-crisis South Korea, and I further investigate if possession of family wealth has a buffering effect on the level of household consumption over economic crisis. Lastly, the association between marital status and the level of life satisfaction is studied at the time of economic crisis as well as during the subsequent period of economic recovery. By examining the subjective aspect of personal well-being in relation to marital status in post- crisis South Korea, I evaluate if the “marriage premium” still holds positive even in the period of severe economic hardships. Based on these theoretical and empirical observations, I discuss in the concluding section a more viable form of capitalist development for the twenty-first century than the current neoliberal mode of globalization.
12 citations