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Title: Empirical essays on the economics of education and pay
Author: Dickson, Matthew Ronald
ISNI:       0000 0004 2668 2775
Awarding Body: University of Warwick
Current Institution: University of Warwick
Date of Award: 2008
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This thesis consists of three stand-alone papers which address different questions regarding the economics of education and pay. The Effect of Free Pre-school Education on Children’s Subsequent Academic Performance: Empirical Evidence from England (Chapter 2) This chapter address the question of whether starting formal education part-time at age three has a positive effect on children’s academic attainment when they reach age 7 and whether this depends on the sector providing the early education. Using a panel of English Local Education Authorities I initially utilise the fact that mandatory provision of free early education for 3-year olds was introduced at different times according to the deprivation of the LEA and then estimate effects separately for more and less deprived LEAs. Exploiting the time dimension of the panel dataset, I am able to control for time-invariant unobserved heterogeneity at the LEA level that may confound estimates from other British cohort studies which rely primarily on cross-sectional variation. I find that early education in public sector nursery and primary schools in the more deprived LEAs has a small positive effect on attainment in reading and writing. These findings suggest that state maintained nursery settings are more effective than private sector providers of early education, especially in more deprived LEAs. The Causal Effect of Education on Wages Revisited (Chapter 3) In this chapter I estimate the causal effect of education on wages comparing estimates that are derived using variations in schooling associated with (a) early smoking behaviour, and (b) the raising of the minimum school leaving age. Earlier research using similar methods covers a wide range and my work is motivated by the concern that what is sometimes claimed as the return to education is only the return for a specific group and this might be rather different to the average return to education in the population. Each of my instruments estimates a ‘local average treatment effect’ and I analyze the extent to which these differ and which is more appropriate for drawing conclusions about the return to education in Britain. I implement each instrument on the same data from the British Household Panel Survey, and use the over-identification to test the validity of my instruments. I also exploit the dual sources of exogenous variation in schooling to derive a further IV estimate of the return to schooling. I find that each of my IV estimates of the return to education are not significantly different to each other (approximately 12%) and are substantially higher than the Ordinary Least Squares estimate (4.6%). The Lifetime Public Premium in Earnings: The View from Europe (written with Fabien Postel-Vinay and Hélène Turon) (Chapter 4) The focus of most of the current literature on public-private pay inequality is on differences in earnings levels, however the public-private differences are equally marked in terms of earnings mobility, earnings dispersion and job loss risk. Forward-looking agents care about earnings and job mobility as well as earnings levels, thus an assessment of the existence of a “public premium” should be based on measures of the lifetime value of employment in either sector. Using data from the European Community Household Panel survey, we evaluate the difference in lifetime value of employment in the public and private sector, taking into account differences in average earnings, earnings dispersion and earnings persistence. In addition to considering the effect of observed individual characteristics, such as education and labour market experience, the estimation strategy allows for unobserved heterogeneity – for example in terms of “public service motivation” – to influence the dynamics of individuals’ employment and earnings patterns. The common format of the ECHP permits the analysis to be carried out for six different European countries – Germany, The Netherlands, France, Italy, Spain and Portugal. This is first time this modelling strategy has been applied to European data, affording an international perspective on public-private pay inequalities.
Supervisor: Not available Sponsor: Economic and Social Research Council (Great Britain) (ESRC)
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: HB Economic Theory ; L Education (General)