AØKA08209U Economics of Education

Volume 2015/2016
Education

Recommended elective at the 3. year of BSc in Economics
Elective at MSc in Economics

Content

This course explores why individuals and society invest in education. Education has many private benefits (earnings, employment, health and longevity, consumption value), as well as social benefits (GDP growth, tax income, positive externalities). Education also affects inequality within a generation and across generations. Throughout this course, current policy issues concerning education will be discussed. Economic models will be connected to data that can be used to test the models' implications, and students will learn how models and data can serve to inform education policy. Applications will address primary and secondary education, university education, and vocational or on-the-job training, and place the Danish and European experience in an international context.

First, we will introduce human capital theory to study individual decision-making. It will be used to analyze investments in education and how they are affected by ability, comparative advantage, family background, and macroeconomic conditions. We will encounter the empirical problem of disentangling the return to education from the return to innate ability, and investigate how the association between education and individual earnings has changed over time.

At the societal level, we will study the social return to education and the financing of publicly provided schooling. Looking at the production of education, we will ask how educational outcomes are produced by schools, whether more money produces higher student achievement, and which school inputs are more or less effective in producing desired educational outcomes (such as PISA test scores). We will consider the potential of early childhood education in the context of skill-formation over the life cycle. We will also reflect on possible conflicts between societal goals - efficiency, equity, and liberty - that influence decisions about the allocation of education resources.

From a macro perspective, education matters for national economic growth as well as for individual mobility. We will investigate whether there is a risk of over-education, or whether individuals under-invest in light of a rapidly changing economic reality and international competition. We will also study the intergenerational transmission of economic status through parental investments, credit constraints and achievement inequality, and the resulting income distribution.

Learning Outcome

This course will teach students how to apply economic thinking to education-related questions. In doing so, the class will draw on a wide range of economic principles and apply material learned in the first year. The variety of models and perspectives will range from macro to micro, including labor economics, macroeconomic growth, and public finance. Students will be equipped with an economic toolbox to evaluate education policy issues methodically, and should eventually be able to use these tools to inform education policy. While the course will be based on theory, it is nevertheless of an empirical nature: recent data will be used to evaluate current issues, and students will learn how to read empirical articles that form the state-of-the art in economics of education.

After taking this course, students should be able to apply economic theories to address education question as a well-trained economist. For this, they have to develop the abilities to

  • Understand economic models in the education context, confidently identify determinants of equilibrium/optimality and describe the role they play relative to each other.
  • Identify key questions in a brief non-specific text, presented as a policy issue rather than an economic model. Then, link the key questions to economics of education.
  • Learn how to choose the correct theory or framework that helps them organize an argument around a given education issue.
  • Communicate their theory-based arguments orally and in written form. Construct concise cases where they show their well-rounded appraisal of the situation that connects theory to the real world.
  • Read selected articles in the current literature, and examine whether the presented empirical evidence convincingly identifies causal relationships. Recall evidence and select the articles or arguments that are relevant to a given problem
  • Evaluate policy proposals critically and present arguments in favor or against them.

 

 

Main textbook: Checchi, D. (2006) The Economics of Education, Cambridge University Press (all chapters).

Further reading (all resources will be available online or at the study library)
 – a few supplemental articles will be added.

  • Becker, G. S. (1991) Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education. National Bureau of Economic Research, distributed by Columbia University Press. Especially Chapter 4 and Appendix.
  • Belfield, C. R. (2000) Economic Principles for Education: Theory and Evidence, Edward Elgar Publishing, Inc. Chapter 2.
  • Borjas, G. J. (2000) Labor Economics, 2nd Ed., Irwin Mcgraw-Hill. Chapter 6.
  • Autor, D. H. and D. Dorn (2013). The Growth of Low-Skill Service Jobs and the Polarization of the USLabor Market. American Economic Review 103 (5), 1553-1597.
  • Becker, G. S. and N. Tomes (1986). Human capital and the rise and fall of families. Journal of Labor Economics 4 (3), 1-47.
  • Belley, P. and L. J. Lochner (2007). The Changing Role of Family Income and Ability in Determining Educational Achievement. Journal of Human Capital 1 (1), 37-89.
  • Card, D. and J. E. DiNardo (2002). Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles. Journal of Labor Economics 20 (4), 733-783.
  • Cunha, F. and J. J. Heckman (2007). The Technology of Skill Formation. The American Economic Review: Papers and Proceedings 97 (2), 31-47.
  • Hanushek, E. A. and L. Woessmann (2010). Education and Economic Growth. In D. J. Brewer and P. J. McEwan (Eds.), Economics of Education, Volume 2, pp. 60-67.Amsterdam: Elsevier.
  • Heckman, J. J. (2011). The American Family in Black and White: A Post-Racial Strategy for Improving Skills to Promote Equality. Daedalus 140 (2), 70-89.
  • Lleras-Muney, A. (2005). The Relationship Between Education and Adult Mortality in theUnited States. Review of Economic Studies 72 (1), 189-221.
  • Lochner, L. J. and E. Moretti (2004). The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports. The American Economic Review 94 (1), 155-189.
  • Psacharopoulos, G. and H. A. Patrinos (2004). Returns to investment in education: a further update. Education Economics 12 (2), 111-134.
  • Solon, G. (2002). Cross-Country Differences in Intergenerational Earnings Mobility. The Journal of Economic Perspectives 16 (3), 59-66.

Additionally, lecture notes are considered study material and are part of the syllabus.

Students should have taken Microeconomics A and B and Econometrics A and B courses corresponding to the 2nd year undergraduate sequence in the Department of Economics.
Student-based discussion on specific topics, where prepared content is debated, to evaluate the strength of different arguments in a peer-review process. Mandatory individual assignments that prepare technical material and practice the exam form (written evaluation of policy-relevant education issues, demonstrating ability to draw on appropriate economic theories).

Schedule:

The course consists of 2x2 hours of classes (lectures) every week for 10½ weeks and 2 hours of exercise classess every week for 14 weeks.

For enrolled students please find more information of courses, schedule, rules etc at
https:/​/​intranet.ku.dk/​economics_ma/​courses/​Pages/​default.aspx

Timetable and classroom:
For time and classroom please press the link under "Se skema" (See schedule) at the right side of this page (15E means 2015 Efterår (Autumn))
  • Category
  • Hours
  • Class Instruction
  • 28
  • Exam
  • 3
  • Lectures
  • 42
  • Preparation
  • 133
  • Total
  • 206
Credit
7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
Individual written closed-book exam at the computers of Copenhagen University
Exam registration requirements

Students have to pass at least 80% of the mandatory assignments.

Aid
Without aids
Marking scale
7-point grading scale
Censorship form
External censorship
100% censorship
Exam period

The exam takes place 17 December 2015 at Peter Bangs Vej 36. 2000 Frederiksberg http:/​/​pc-eksamen.ku.dk/​pc_exam

For enrolled students more information about examination, exam/re-sit, rules etc. is available at the student intranet for Examination (English),student intranet for Examination (KA-Danish) and student intranet for Examination (BA-Danish).

Re-exam

Same as the ordinary exam. But if only a few students have registered for the re-exam, the exam might change to an oral exam. This means that the examination date also will change.

 

Criteria for exam assesment

The student must in a satisfactory way demonstrate that he/she has mastered the learning outcome of the course.