Mueller, Normann (2007): (Mis-)Understanding Education Externalities.
Download (210kB) | Preview
This article critically evaluates the current state of research on education externalities. It occurs that much of the confusion regarding their magnitude results from conceptual misunderstandings pertaining to their nature. The essay distinguishes the concepts education, teaching, and knowledge. Whereas pure teaching yields externalities on the primary and secondary level, only the generation of knowledge may produce the spillovers which are typically linked to the tertiary level. The accumulation of education itself does not have such an effect. Education is argued to be a private good with well defined property rights. Individuals may exploit those and provide the production sector with the efficient amount of human capital. Following this rationale, it is demonstrated that empirical studies, contrasting estimations of private and social returns to education, are unsuitable to substantiate the existence of externalities. As a consequence, subsidies to tertiary programs are called into question.
|Item Type:||MPRA Paper|
|Institution:||University of Tuebingen|
|Original Title:||(Mis-)Understanding Education Externalities|
|Keywords:||Public education finance; Education expenditures; Human capital externalities; Property rights; Endogenous economic growth; Private return; Social return; Public goods|
|Subjects:||I - Health, Education, and Welfare > I2 - Education and Research Institutions > I22 - Educational Finance ; Financial Aid
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H23 - Externalities ; Redistributive Effects ; Environmental Taxes and Subsidies
D - Microeconomics > D6 - Welfare Economics > D62 - Externalities
|Depositing User:||Normann Mueller|
|Date Deposited:||16 Oct 2007|
|Last Modified:||09 Feb 2016 23:20|
Amabile, T. M. (1983): The social psychology of creativity. Springer, New York. Acemoglu, Daron; Angrist, Joshua (2000): How Large Are Human Capital Externalities? Evidence from Compulsory Schooling Laws, Macroeconomics Annual, 15, 9-58. A'Hearn, Brian; Baten, Jörg; Crayen, Dorothee (2006): Quantifying Quantitative Literacy: Age Heaping and the History of Human Capital, Universitat Pompeu Fabra Economics Working Paper No. 996. Baqir, Reza (2002): Social Spending in a Panel of Countries, International Monetary Fund, IMF Working Papers WP/02/03, Washington, DC. Barnett, Andy H.; Yandle, Bruce (2005): The End of the Externality Revolution, Working Paper, Auburn, AL. Barro, Robert J. (1991): Economic Growth in a Cross Section of Countries, Quarterly Journal of Economics, 106 (2), 407-443. Barro, Robert J. (2001): Human Capital and Growth, American Economic Review, 91 (2), 12-17. Barro, Robert J.; Lee, Jong-Wha (1993): International Comparisons of Educational Attainment, Journal of Monetary Economics, 32 (3), 363-394. Becker, Gary S. (1964): Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, The University of Chicago Press, Chicago. Benhabib, Jess; Spiegel, Mark M. (1994): The Role of Human Capital in Economic Development: Evidence from Aggregate Cross-Country Data, Journal of Monetary Economics, 34 (2), 143-174. Blaug, Mark (1970): An Introduction to the Economics of Education, Penguin Books, Baltimore. Blaug, Mark (1982): The Distributional Effects of Higher Education Finance, Economics of Education Review, 2 (3), 209-231. Ciccone, Antonio; Peri, Giovanni (2006): Identifying Human Capital Externalities: Theory with Applications, Review of Economic Studies, 73, 381-412. Coase, Ronald H. (1960): The Problem of Social Cost, The Journal of Law and Economics, 3, 1-44. Cullis, John; Jones, Philip (1998): Public Finance and Public Choice, Oxford University Press, New York. Downs, Anthony (1957): An Economic Theory of Democracy, Harper & Row, New York. Gundlach, Erich; Woessmann, Ludger (2004): Bildungsressourcen, Bildungsinstitutionen und Bildungsqualität: Makrökonomische Relevanz und mikroökonomische Evidenz, in: Backes-Gellner, Moog (ed.): Ökonomie der Evaluation von Schulen und Hochschulen, Schriften des Vereins für Socialpolitik, N.F. 302, Duncker & Humblodt, Berlin, 15-52. Hall, Robert E.; Jones, Charles I. (1999): Why Do Some Countries Produce So Much More Output per Worker than Others?, Quarterly Journal of Economics, 114 (1), 83-116. Hansen, Lee; Weisbrod, Burton (1969): The Distribution of Costs and Direct Benefits of Public Higher Education: The Case of California, Journal of Human Resources, 4 (2), 176-191. Hanushek, Eric (1989): Expenditures, Efficiency, and Equity in Education: The Federal Government's Role, American Economic Review, 79 (2), 46-51. Hanushek, Eric A.; Kimko, Dennis (2000): Schooling, Labor Force Quality, and the Growth of Nations, American Economic Review, 90 (5), 1181-1208. Harmon, Colm; Oosterbeek, Hessel; Walker, Ian (2003): Returns to Education: Microeconomics, Journal of Economic Surveys, 17 (2), 115-155. Heckman, James J.; Klenow, Peter J. (1997): Human Capital Policy, mimeo, University of Chicago, Chicago. Hoxby, Caroline M. (2000): The Effects of Class Size on Student Achievement, Quarterly Journal of Economics, 115 (4), 1239-1285. Krueger, A.; Lindahl, M. (2001): Education for Growth: Why and For Whom?, Journal of Economic Literature, 29, 1101-1136. Layard, Richard (2005): The New Happiness, Penguin Press. Lindert, Peter H. (2004): Growing Public - Social Spending and Economic Growth Since the Eighteenth Century, Volumes 1 & 2, Cambridge University Press, Cambridge. Lucas, Robert E. (1988): On the Mechanics of Economic Development, Journal of Monetary Economics, 22 (1), 3-42. Mankiw, Gregory N; Romer, David; Weil, David N. (1992): A Contribution to the Empirics of Economic Growth, Quarterly Journal of Economics, 107 (2), 407-437. Marshall, Alfred (1922): Principles of Economics, Macmillan, London. Meltzer, Allan H.; Richard, Scott F. (1981): A Rational Theory of the Size of Government, Journal of Political Economy, 89 (5), 914-927. Mincer, Jacob (1958): Investment in Human Capital and Personal Income Distribution, Journal of Political Economy, 66, 281-302. Mincer, Jacob (1974): Schooling, Experience and Earnings, Columbia University Press, New York. Moretti, Enrico (2003): Human Capital Externalities in Cities, National Bureau of Economic Research, NBER Working Paper 9641, Cambridge, MA. Moretti, Enrico (2004): Estimating the Social Return to Higher Education: Evidence from Longitudinal and Cross-Sectional Data, Journal of Econometrics, 121, 157-212. Mueller, Dennis C. (2003): Public Choice III, Cambridge University Press, Cambridge. Muravyev, Alexander (2006): Human Capital Externalities: Evidence from the Transition Economy of Russia, German Institute for Economic Research, Discussion Paper 629, Berlin. Musgrave, Richard A. (1959): The theory of public finance – A Study in Public Economy, International Student Edition, McGraw-Hill, New York. Musgrave, Richard A.; Musgrave, Peggy B. (1984): Public Finance in Theory and Practice, 4th edition, McGraw-Hill, New York. OECD (2006): Education at a glance: OECD indicators, OECD, Paris. Pigou, Arthur Cecil (1920): Economics of Welfare, Macmillan Publishing, London. Pritchett, Lant (2001): Where Has All the Education Gone?, World Bank Economic Review, 15 (3), 367-391. Psacharopoulos, George (1973): Returns to Education: An International Comparison, Elsevier, Amsterdam. Psacharopoulos, George (1994): Returns to Investment in Education: A Global Update, World Development, 22, 1325-1343. Psacharopoulos, George; Patrinos, Harry A. (2002): Returns to Investment in Education: A Further Update, World, Bank, World Bank Policy Research Working Paper 2881, Washington, DC. Pyndick, Robert S.; Rubinfeld, Daniel L. (2005): Microeconomics, 6th edition, Pearson Prentice Hall, Upper Saddle River, NJ. Rauch, James E. (1993): Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities, Journal of Urban Economics, 34, 380-400. Romer, Paul M. (1990): Endogenous Technological Change, Journal of Political Economy, 99 (5), S71-S102. Rosen, Harvey (2005): Public Finance, 7th edition, McGraw-Hill/Irwin, Boston. Rudd, Jeremy (2000): Empirical Evidence on Human Capital Spillovers, Federal Reserve Board, Finance and Economics Discussion Paper 2000-46, Washington, DC. Schultz, Theodore W. (1960): Capital Formation by Education, Journal of Political Economy, 68 (6), 571-583. Sianesi, Barbara; Van Reenen, John (2003): The Returns to Education: Macroeconomics, Journal of Economic Surveys, 17 (2), 157-200. Solow, Robert M. (1956): A Contribution to the Theory of Economic Growth, Quarterly Journal of Economics, 70, 65-94. Stasavage, Daniel (2005): Democracy and Education Spending in Africa, American Journal of Political Science, 49 (2), 343-358. Uzawa, Hirofumi (1965): Optimum Technical Change in an Aggregative Model of Economic Growth, International Economic Review, 6, 18-31. Young, Alwyn (1995): The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience, Quarterly Journal of Economics, 110 (2), 641-680.