Pub Date : 2007-09-21DOI: 10.1111/j.1468-0327.2007.00188.x
V. Denicoló
"Is the current level of patent protection too high or too low? To address this issue, this paper reformulates the theoretical analysis of the optimal level of patent protection to take into account the empirical findings of the innovation production function literature. This literature finds a strong relationship between R&D spending and inventions and estimates an elasticity of the supply of inventions of 0.5 or more. The paper then assesses the current level of patent protection, exploiting estimates of the private and social returns to R&D taken from the empirical literature and other available sources. Although more research is needed for a more precise assessment, the evidence available suggests that patents do not over-compensate innovators." Copyright (c) CEPR, CES, MSH, 2007.
{"title":"Do Patents Over-Compensate Innovators?","authors":"V. Denicoló","doi":"10.1111/j.1468-0327.2007.00188.x","DOIUrl":"https://doi.org/10.1111/j.1468-0327.2007.00188.x","url":null,"abstract":"\"Is the current level of patent protection too high or too low? To address this issue, this paper reformulates the theoretical analysis of the optimal level of patent protection to take into account the empirical findings of the innovation production function literature. This literature finds a strong relationship between R&D spending and inventions and estimates an elasticity of the supply of inventions of 0.5 or more. The paper then assesses the current level of patent protection, exploiting estimates of the private and social returns to R&D taken from the empirical literature and other available sources. Although more research is needed for a more precise assessment, the evidence available suggests that patents do not over-compensate innovators.\" Copyright (c) CEPR, CES, MSH, 2007.","PeriodicalId":236508,"journal":{"name":"Wiley-Blackwell: Economic Policy","volume":"28 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129802951","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2007-09-01DOI: 10.1111/j.1468-0327.2007.00187.x
William R. Easterly
"The record of the aid agencies over time seems to indicate weak evidence of progress in response to learning from experience, new knowledge, or changes in political climate. The few positive results are an increased sensitivity to per capita income of the recipient (although it happened long ago), a decline in the share of food aid, and a decline in aid tying. Most of the other evidence - increasing donor fragmentation, unchanged emphasis on technical assistance, little or no sign of increased selectivity with respect to policies and institutions, the adjustment lending-debt relief imbroglio - suggests an unchanged status quo, lack of response to new knowledge, and repetition of past mistakes." Copyright (c) CEPR, CES, MSH, 2007.
{"title":"Are Aid Agencies Improving?","authors":"William R. Easterly","doi":"10.1111/j.1468-0327.2007.00187.x","DOIUrl":"https://doi.org/10.1111/j.1468-0327.2007.00187.x","url":null,"abstract":"\"The record of the aid agencies over time seems to indicate weak evidence of progress in response to learning from experience, new knowledge, or changes in political climate. The few positive results are an increased sensitivity to per capita income of the recipient (although it happened long ago), a decline in the share of food aid, and a decline in aid tying. Most of the other evidence - increasing donor fragmentation, unchanged emphasis on technical assistance, little or no sign of increased selectivity with respect to policies and institutions, the adjustment lending-debt relief imbroglio - suggests an unchanged status quo, lack of response to new knowledge, and repetition of past mistakes.\" Copyright (c) CEPR, CES, MSH, 2007.","PeriodicalId":236508,"journal":{"name":"Wiley-Blackwell: Economic Policy","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127778174","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2007-08-31DOI: 10.1111/j.1468-0327.2007.00193.x
L. Fontagné, G. Gaulier, Soledad Zignago
Analyzing a new database that makes it possible to disaggregate trade flows across many countries according to unit values, we show that international specialization in terms of quality within industries and product categories plays an important role in the dynamics of North-South competition. The different specialization of countries at different levels of development within products and across varieties is mirrored in the recent shifts in world market shares, which are very different across quality segments: the South is not gaining market share in high-value portions of trade pattern. In this respect Europe's specialization pattern appears to be different from that of the US and Japan, and may allow it to better resist the competitive pressure of the South.
{"title":"Specialization Across Varieties and North-South Competition","authors":"L. Fontagné, G. Gaulier, Soledad Zignago","doi":"10.1111/j.1468-0327.2007.00193.x","DOIUrl":"https://doi.org/10.1111/j.1468-0327.2007.00193.x","url":null,"abstract":"Analyzing a new database that makes it possible to disaggregate trade flows across many countries according to unit values, we show that international specialization in terms of quality within industries and product categories plays an important role in the dynamics of North-South competition. The different specialization of countries at different levels of development within products and across varieties is mirrored in the recent shifts in world market shares, which are very different across quality segments: the South is not gaining market share in high-value portions of trade pattern. In this respect Europe's specialization pattern appears to be different from that of the US and Japan, and may allow it to better resist the competitive pressure of the South.","PeriodicalId":236508,"journal":{"name":"Wiley-Blackwell: Economic Policy","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-08-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130407027","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2007-07-01DOI: 10.1111/j.1468-0327.2007.00182.x
R. Hausmann, F. Sturzenegger
"Current account statistics may not be good indicators of the evolution of a country's net foreign assets and of its external position's sustainability. The value of existing assets may vary independently of current account flows, so-called 'return privileges' may allow some countries to obtain abnormal returns, and mismeasurement of FDI, unreported trade of insurance or liquidity services, and debt relief may also play a role. We analyse the relevant evidence in a large set of countries and periods, and examine measures of net foreign assets obtained by capitalizing the net investment income and then estimating the current account from the changes in this stock of foreign assets. We call dark matter the difference between our measure of net foreign assets and that measured by official statistics. We find it to be important for many countries, analyse its relationship with theoretically relevant factors, and note that the resulting perspective tends to make global net asset positions appear relatively stable." Copyright (c) CEPR, CES, MSH, 2007.
{"title":"The Missing Dark Matter in the Wealth of Nations and its Implications for Global Imbalances","authors":"R. Hausmann, F. Sturzenegger","doi":"10.1111/j.1468-0327.2007.00182.x","DOIUrl":"https://doi.org/10.1111/j.1468-0327.2007.00182.x","url":null,"abstract":"\"Current account statistics may not be good indicators of the evolution of a country's net foreign assets and of its external position's sustainability. The value of existing assets may vary independently of current account flows, so-called 'return privileges' may allow some countries to obtain abnormal returns, and mismeasurement of FDI, unreported trade of insurance or liquidity services, and debt relief may also play a role. We analyse the relevant evidence in a large set of countries and periods, and examine measures of net foreign assets obtained by capitalizing the net investment income and then estimating the current account from the changes in this stock of foreign assets. We call dark matter the difference between our measure of net foreign assets and that measured by official statistics. We find it to be important for many countries, analyse its relationship with theoretically relevant factors, and note that the resulting perspective tends to make global net asset positions appear relatively stable.\" Copyright (c) CEPR, CES, MSH, 2007.","PeriodicalId":236508,"journal":{"name":"Wiley-Blackwell: Economic Policy","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129615278","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2007-01-01DOI: 10.1111/j.1468-0327.2007.00174.x
E. Barbier
"This paper explores two methods for valuing ecosystems by valuing the services that they yield to various categories of user and that are not directly valued in the market, and illustrates the usefulness of these methods with an application to the valuation of mangrove ecosystems in Thailand. The first method is known as the production function approach and relies on the fact that ecosystems may be inputs into the production of other goods or services that are themselves marketed, such as fisheries. I discuss issues that arise in measuring the input into fisheries, particularly those due to the fact that the fishery stock is changing over time, and the shadow value of the ecosystem consists in its contribution to the maintenance of the stock as well as its contribution to current output. The second method is known as the expected damage approach and is used to value the services of storm protection in terms of the reduction in expected future storm damage that the ecosystem can provide. These two methods are shown to yield very different valuations of ecosystems from those that would be derived by the methods typically used in cost-benefit analyses. I argue that they represent a significant improvement on current practice." Copyright (c) CEPR, CES, MSH, 2007.
{"title":"Valuing Ecosystem Services as Productive Inputs","authors":"E. Barbier","doi":"10.1111/j.1468-0327.2007.00174.x","DOIUrl":"https://doi.org/10.1111/j.1468-0327.2007.00174.x","url":null,"abstract":"\"This paper explores two methods for valuing ecosystems by valuing the services that they yield to various categories of user and that are not directly valued in the market, and illustrates the usefulness of these methods with an application to the valuation of mangrove ecosystems in Thailand. The first method is known as the production function approach and relies on the fact that ecosystems may be inputs into the production of other goods or services that are themselves marketed, such as fisheries. I discuss issues that arise in measuring the input into fisheries, particularly those due to the fact that the fishery stock is changing over time, and the shadow value of the ecosystem consists in its contribution to the maintenance of the stock as well as its contribution to current output. The second method is known as the expected damage approach and is used to value the services of storm protection in terms of the reduction in expected future storm damage that the ecosystem can provide. These two methods are shown to yield very different valuations of ecosystems from those that would be derived by the methods typically used in cost-benefit analyses. I argue that they represent a significant improvement on current practice.\" Copyright (c) CEPR, CES, MSH, 2007.","PeriodicalId":236508,"journal":{"name":"Wiley-Blackwell: Economic Policy","volume":"53 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130323226","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2007-01-01DOI: 10.1111/j.1468-0327.2007.00172.x
Sebastian G. Kessing, Kai A. Konrad, Christos Kotsogiannis
"Both in the developed and developing world, decentralization of fiscal policy is frequently argued to foster investment, because allowing investors to choose between competing locations should make it difficult for each jurisdiction to tax the investment's returns. We point out that this 'horizontal' dimension of decentralization cannot eliminate ex post incentives to tax investments once they are irreversibly located in a jurisdiction, and that the negative ex ante investment effects of such 'hold up' problems are actually stronger when decentralization inevitably leads to multiple levels of taxation power in each location. Empirically, we detect significant negative effects on FDI of the 'vertical' dimension of decentralization, measured by the number of government layers, in a data set containing many countries and many suitable control variables. Indicators of overall fiscal decentralization do not appear to affect the investment climate negatively per se, but our theoretical arguments and empirical results suggest that policymakers should consider very carefully the form and degree of government decentralization if they aim at improving the investment climate." Copyright (c) CEPR, CES, MSH, 2007.
{"title":"Foreign Direct Investment and the Dark Side of Decentralization","authors":"Sebastian G. Kessing, Kai A. Konrad, Christos Kotsogiannis","doi":"10.1111/j.1468-0327.2007.00172.x","DOIUrl":"https://doi.org/10.1111/j.1468-0327.2007.00172.x","url":null,"abstract":"\"Both in the developed and developing world, decentralization of fiscal policy is frequently argued to foster investment, because allowing investors to choose between competing locations should make it difficult for each jurisdiction to tax the investment's returns. We point out that this 'horizontal' dimension of decentralization cannot eliminate ex post incentives to tax investments once they are irreversibly located in a jurisdiction, and that the negative ex ante investment effects of such 'hold up' problems are actually stronger when decentralization inevitably leads to multiple levels of taxation power in each location. Empirically, we detect significant negative effects on FDI of the 'vertical' dimension of decentralization, measured by the number of government layers, in a data set containing many countries and many suitable control variables. Indicators of overall fiscal decentralization do not appear to affect the investment climate negatively per se, but our theoretical arguments and empirical results suggest that policymakers should consider very carefully the form and degree of government decentralization if they aim at improving the investment climate.\" Copyright (c) CEPR, CES, MSH, 2007.","PeriodicalId":236508,"journal":{"name":"Wiley-Blackwell: Economic Policy","volume":"170 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124741116","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2007-01-01DOI: 10.1111/j.1468-0327.2007.00173.x
Winfried Koeniger, M. Leonardi
Capital deepening may affect the evolution of the wage differential between skilled and unskilled workers differently in countries with different labor market institutions. If labor market institutions raise the relative wage of unskilled workers in Germany, firms have incentives to invest relatively more into capital equipment complementary to unskilled workers. Instead in the US, where wage-compressing institutions are weaker, firms invest more in high-skilled workers. We provide evidence consistent with this view based on an industry panel for West Germany and the US between the 1970s and 1990s. We show that capital equipment per worker is less positively associated with the wage differential in West Germany than in the US. This descriptive evidence is robust to many alternative measures for capital and skills. Our estimates imply that capital deepening in Germany in the 1980s is associated with a reduction in the wage differential of about 10-20% in most industries. In the US instead, capital deepening is associated with an increase of the wage differential between 5 and 15% in most industries.
{"title":"Capital Deepening and Wage Differentials: Germany versus US","authors":"Winfried Koeniger, M. Leonardi","doi":"10.1111/j.1468-0327.2007.00173.x","DOIUrl":"https://doi.org/10.1111/j.1468-0327.2007.00173.x","url":null,"abstract":"Capital deepening may affect the evolution of the wage differential between skilled and unskilled workers differently in countries with different labor market institutions. If labor market institutions raise the relative wage of unskilled workers in Germany, firms have incentives to invest relatively more into capital equipment complementary to unskilled workers. Instead in the US, where wage-compressing institutions are weaker, firms invest more in high-skilled workers. We provide evidence consistent with this view based on an industry panel for West Germany and the US between the 1970s and 1990s. We show that capital equipment per worker is less positively associated with the wage differential in West Germany than in the US. This descriptive evidence is robust to many alternative measures for capital and skills. Our estimates imply that capital deepening in Germany in the 1980s is associated with a reduction in the wage differential of about 10-20% in most industries. In the US instead, capital deepening is associated with an increase of the wage differential between 5 and 15% in most industries.","PeriodicalId":236508,"journal":{"name":"Wiley-Blackwell: Economic Policy","volume":"52 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116151325","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2006-10-01DOI: 10.1111/j.1468-0327.2006.00170.x
D. Neven
type="main" xml:lang="en"> This paper aims to assess the influence that economic analysis has had on competition policy in the European Union over the last twenty years. Economists are increasingly used in antitrust cases; the annual turnover of the main economic consultancy firms has increased by a factor of 20 since the early 1990s and currently exceeds £20 million. This is about 15% of the aggregate fees earned on antitrust cases, a proportion close to that in the US. The economic resources mobilized by the EU Commission are, however, an order of magnitude smaller and this imbalance is a source of concern. The legal framework and the case decisions have also been influenced by economic analysis in important ways. For instance, the analysis of agreements between firms has increasingly focused on effects; the analysis of the factors that determine effective competition has become more sophisticated; the concept of collective dominance has been progressively developed in terms of the theory of collusion in repeated interactions, and quantitative methods have become more important. However, enforcement has sometimes appealed to economic reasoning in flawed or speculative ways; the paper discusses procedural reasons why this may have occurred. This paper assesses the system of evidence gathering implemented by the Commission in the light of the law and economics literature. It is concluded that while the reforms recently implemented by the Commission do address the main weaknesses of this system, they may still not allow for the most effective development of economic theory and evidence in actual cases. — Damien J. Neven
{"title":"Competition Economics and Antitrust in Europe","authors":"D. Neven","doi":"10.1111/j.1468-0327.2006.00170.x","DOIUrl":"https://doi.org/10.1111/j.1468-0327.2006.00170.x","url":null,"abstract":"type=\"main\" xml:lang=\"en\"> This paper aims to assess the influence that economic analysis has had on competition policy in the European Union over the last twenty years. Economists are increasingly used in antitrust cases; the annual turnover of the main economic consultancy firms has increased by a factor of 20 since the early 1990s and currently exceeds £20 million. This is about 15% of the aggregate fees earned on antitrust cases, a proportion close to that in the US. The economic resources mobilized by the EU Commission are, however, an order of magnitude smaller and this imbalance is a source of concern. The legal framework and the case decisions have also been influenced by economic analysis in important ways. For instance, the analysis of agreements between firms has increasingly focused on effects; the analysis of the factors that determine effective competition has become more sophisticated; the concept of collective dominance has been progressively developed in terms of the theory of collusion in repeated interactions, and quantitative methods have become more important. However, enforcement has sometimes appealed to economic reasoning in flawed or speculative ways; the paper discusses procedural reasons why this may have occurred. This paper assesses the system of evidence gathering implemented by the Commission in the light of the law and economics literature. It is concluded that while the reforms recently implemented by the Commission do address the main weaknesses of this system, they may still not allow for the most effective development of economic theory and evidence in actual cases. — Damien J. Neven","PeriodicalId":236508,"journal":{"name":"Wiley-Blackwell: Economic Policy","volume":"201 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115489263","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2006-10-01DOI: 10.1111/j.1468-0327.2006.00167.x
G. Corsetti, Gernot Müller
type="main" xml:lang="en"> Simple accounting suggests that shocks to the government budget move the current account in the same direction, and this ‘twin deficits’ intuition leads many observers to call for fiscal consolidation in the US as a necessary measure to reduce the large external imbalance of this country. The response of other macroeconomic variables to budget developments, however, has important implications for ‘twin deficits’ and for this policy prescription. Focusing on the international transmission of fiscal policy shocks via terms of trade changes, we show that the likelihood and magnitude of twin deficits increases with the degree of openness of an economy, and decreases with the persistence of fiscal shocks. We take this insight to the data and investigate the transmission of fiscal shocks in a vector autoregression (VAR) model estimated for Australia, Canada, the UK and the US. We find that in less open countries the external impact of shocks to either government spending or budget deficits is limited, while private investment responds in line with our theoretical prediction. These results suggest that a fiscal retrenchment in the US may have a limited impact on its current external deficit. — Giancarlo Corsetti and Gernot J. Muller
{"title":"Twin Deficits: Squaring Theory, Evidence and Common Sense","authors":"G. Corsetti, Gernot Müller","doi":"10.1111/j.1468-0327.2006.00167.x","DOIUrl":"https://doi.org/10.1111/j.1468-0327.2006.00167.x","url":null,"abstract":"type=\"main\" xml:lang=\"en\"> Simple accounting suggests that shocks to the government budget move the current account in the same direction, and this ‘twin deficits’ intuition leads many observers to call for fiscal consolidation in the US as a necessary measure to reduce the large external imbalance of this country. The response of other macroeconomic variables to budget developments, however, has important implications for ‘twin deficits’ and for this policy prescription. Focusing on the international transmission of fiscal policy shocks via terms of trade changes, we show that the likelihood and magnitude of twin deficits increases with the degree of openness of an economy, and decreases with the persistence of fiscal shocks. We take this insight to the data and investigate the transmission of fiscal shocks in a vector autoregression (VAR) model estimated for Australia, Canada, the UK and the US. We find that in less open countries the external impact of shocks to either government spending or budget deficits is limited, while private investment responds in line with our theoretical prediction. These results suggest that a fiscal retrenchment in the US may have a limited impact on its current external deficit. — Giancarlo Corsetti and Gernot J. Muller","PeriodicalId":236508,"journal":{"name":"Wiley-Blackwell: Economic Policy","volume":"11 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128058692","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2006-09-01DOI: 10.1111/j.1468-0327.2007.00189.x
G. Brunello, D. Checchi
This paper investigates whether at the interaction between family background and school tracking affects human capital accumulation. Our a priori view is that more tracking should reinforce the role of parental privilege, and thereby reduce equality of opportunity. Compared to the current literature, which focuses on early outcomes, such as test scores at 13 and 15, we look at later outcomes, including literacy, dropout rates, college enrolment, employability and earnings. While we do not confirm previous results that tracking reinforces family background effects on literacy, we do confirm our view when looking at educational attainment and labour market outcomes. When looking at early wages, we find that parental background effects are stronger when tracking starts earlier. We reconcile the apparently contrasting results on literacy, educational attainment and earnings by arguing that the signalling role of formal education – captured by attainment – matters more than actual skills – measured by literacy – in the early stages of labour market experience.
{"title":"Does School Tracking Affect Equality of Opportunity? New International Evidence","authors":"G. Brunello, D. Checchi","doi":"10.1111/j.1468-0327.2007.00189.x","DOIUrl":"https://doi.org/10.1111/j.1468-0327.2007.00189.x","url":null,"abstract":"This paper investigates whether at the interaction between family background and school tracking affects human capital accumulation. Our a priori view is that more tracking should reinforce the role of parental privilege, and thereby reduce equality of opportunity. Compared to the current literature, which focuses on early outcomes, such as test scores at 13 and 15, we look at later outcomes, including literacy, dropout rates, college enrolment, employability and earnings. While we do not confirm previous results that tracking reinforces family background effects on literacy, we do confirm our view when looking at educational attainment and labour market outcomes. When looking at early wages, we find that parental background effects are stronger when tracking starts earlier. We reconcile the apparently contrasting results on literacy, educational attainment and earnings by arguing that the signalling role of formal education – captured by attainment – matters more than actual skills – measured by literacy – in the early stages of labour market experience.","PeriodicalId":236508,"journal":{"name":"Wiley-Blackwell: Economic Policy","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114244577","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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