Essays on the economics of education

• Main Author: Megalokonomou, Rigissa
• Published: University of Warwick 2015
• Subjects: 338.4; LC Special aspects of education
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.690490

Nowadays and more generally, discrepancies in economic growth between otherwise similar countries are vast and in a large extent unexplained by economic theory. Economists in their endeavour of disentangling this puzzle bring education in the frontline as empirical evidence indicates that in some cases reforms in education are significant in explaining shifts in economic performance. This thesis consists of three papers which address different questions in related fields regarding the economics of education. The second chapter of this thesis concerns the effect of releasing information to students about their relative performance within their school and nationwide. Knowing how one's characteristics compare to those of other individuals is important in every setting of economic decision making. This chapter examines the effects of providing relative performance information on students' short and long term outcomes. I exploit a large scale natural experiment that took place in Greece. Using unique primary data on students' performance throughout senior high school, we find an asymmetric response to feedback: high-achieving students improve their final-year performance by 0.15 of a standard deviation, whereas the final-year performance of low-achieving students drops by 0.3 of a standard deviation. The results are consistently more pronounced for females indicating greater sensitivity to feedback. I also document the long-term effects of feedback: high-achieving students reduce their repetition rate for the national exams; they enrol into university departments that are more selective by 0.15 of a standard deviation and their expected annual earnings increase by 0.17 of a standard deviation. By contrast, the results for low-achieving students are negative. I provide suggestive evidence that feedback encourages students from low-income neighbourhoods to enrol in university and to study in higher-quality programs, which may, in the long run, reduce income inequality. The third chapter of this thesis examines the extent to which college decisions among adolescents depend on the decisions of their peers. In the recent years, the importance of one's group of peers-be that friends, colleagues, neighbors- has been widely emphasized in the literature. In this paper, I ask whether individuals derive utility from conformity in college enrolment. I propose a new methodology in mitigating re ection and endogeneity issues in identifying social interactions. The instrument that I propose is the percentage of females in one's school, neighbourhood and preferacture the year before. Evidence from the psychology literature support our assumption that the prevalence of females creates a less violent and disruptive environment. I exploit a special institutional setting, in which schools are very close to each other, allowing for students from different schools to interact. I investigate utility spillovers from the educational choices of students in consecutive cohorts. Spatial variation allows us to identify social interactions in groups of various sizes, using a new dataset that spans the universe of high school graduates. I find positive and significant externalities in the decision to enrol in college among peers who belong to the same social group. Results indicate that students who attend high school with 10% more classmates who enrol in college are 4.5 % percentage points more likely to themselves attend college. In the forth chapter, I investigate the causal effect of school attendance on students' performance. I exploit a natural experiment that changed the school absences allowance for the high achieving students in order to identify the effect of school attendance on educational outcomes. I use a novel dataset that contains class attendance information about students in eleventh and twelfth grade. The natural experiment took place in Greece in 2007 and provided higher performing students with 50 more hours of excused absences from school. I start off by using a Regression Discontinuity approach in order to measure the change in total absences and exam score due to the reform around the cut-off. The regression discontinuity cannot find an effect around the cut-off. The reason behind that is that the effect might not be caused by students around the threshold but by students in the right tail of the performance distribution. Next, I employ a combination of differences-in-differences and instrumental variables techniques in order to identify returns to absences. Our estimates show significant negative returns to absences.