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Abstract:
Contemporary views on the determinants of economic growth place education in centre stage. Yet the way in which education affects growth is not yet well understood. This paper begins by surveying the recent literature on the factors that affect growth, paying particular attention to education. It then proceeds to estimate a comprehensive model of growth, testing its robustness across regions of the world. Policy conclusions are drawn.

growth, education, political economy

Abstract:
A multiproduct cost function is estimated for English higher education institutions using a panel of data from recent years. The panel approach allows estimation by means of a random parameter stochastic frontier model which provides considerable new insights in that it allows the impact on costs of inter-institutional differences in the cost function itself to be distinguished from inter-institutional differences in efficiency. The approach used here therefore resembles in some respects the non-parametric methods of efficiency evaluation. We report also on measures of average incremental cost of provision and on returns to scale and scope.

stochastic frontier, random parameter models, costs, higher education

Abstract:
A random parameters stochastic frontier model is applied to Italian data in order to evaluate the cost function and efficiency of higher education institutions. The method yields useful information about inter-institutional variation in cost structure and technical efficiency. Returns to scale and scope are evaluated for the typical university, and it is found that these returns are almost ubiquitously decreasing, a finding with clear policy implications.

stochastic frontier, random parameter models, costs, higher education

Abstract:
The institutional framework for the funding of higher education in the UK is discussed. In England, much of the financial support for teaching and learning, especially of 'home and EU' undergraduates, is channelled through the Higher Education Funding Council for England (HEFCE). HEFCE operates a formula funding mechanism, though in the wake of recent policy reforms - which include the introduction of differential tuition fees - this is likely to change. Some simple economic models of funding mechanisms which may be suitable for application in this context are constructed and evaluated. Implications for the design of future policies are discussed.

funding, education

Abstract:
A multiproduct cost function is estimated for German higher education institutions using a panel of data from recent years. The use of panel data allows a random parameter stochastic frontier model to be estimated, and this delivers new insights on the extent to which differences in costs between institutions producing similar vectors of outputs may be due to different cost structures, on the one hand, and efficiency, on the other. The approach used here therefore resembles in some respects the non-parametric methods of efficiency evaluation, since different loss functions attach to different universities. We report also on measures of average incremental cost of provision and on returns to scale and scope.

stochastic frontier, random parameter models, costs, higher education

Abstract:
Regression and neural network models of wage determination are constructed where the explanatory variables include detailed information about skills. People skills, strategic skills, and IT skills all carry strong and significant wage premia; problem-solving skills (surprisingly) and physical skills (less surprisingly) do not. In contrast to the impact of school curriculum on subsequent earnings, the neural network modelling procedure does not pick up any significant nonlinearities in the relationship between skills and earnings.

skills, earnings, neural networks

Abstract:
The impact of environmental Kuznets curve (EKC) effects is evaluated in the context of a full model of production and trade within and between rich and poor economies. The shape of iso-emissions curves, defined in tariff and emissions tax space, is evaluated both in the presence and in the absence of an EKC. Gains in the income of developing countries are possible without compromising on emissions where there are inefficiencies in policy. However, where policy is efficient there exists an important trade-off, evaluated here, between emissions and developing country income.

Trade, Environment

Abstract:
The determinants of students' propensity to drop out of university are analysed using individual records of all students passing through the central applications process in 1993. The data set comprises about 100,000 individuals and allows a much more thorough analysis of student wastage than has been possible in the past. The main reasons for attrition, academic failure ('involuntary' attrition) and 'voluntary' dropout, are modelled. The results highlight, inter alia, the importance of matching and peer group effects, both of which have been found to be important determinants of student outcomes in the US but which have been subject to little empirical scrutiny for the UK.

Abstract:
Regression and neural network models of wage determination are constructed where the explanatory variables include detailed information about the impact of school curricula on future earnings. It is established that there are strong non-linearities and interaction effects present in the relationship between curriculum and earnings. The results have important implications in the context of the human capital vs. signalling and screening debate. They also throw light on contemporary policy issues concerning the desirability of breadth vs. depth in the school curriculum.

Abstract:
Changes in the characteristics and skills of British youths between the mid-1980s and mid-2000s are evaluated using a method recently developed by Altonji et al. The main finding is that skills have increased over time in successive cohorts of young people. The improvement is, however, uneven, and those at the bottom end of the skills distribution have benefitted less than others. This implies, other things being equal, that the distribution of earnings will widen over the coming years.

skills

Abstract:
We construct a family of models to analyse the effect on optimal educational investment of (i) society's preferences for equity and (ii) competition between countries. The models provide insights about the impact of a variety of parameters on optimal policy. In particular, we identify a form of 'overeducation' that is new to the literature, and provide a counterexample to a common finding in the literature on fiscal federalism.

education, taxation, income distribution, competition

Abstract:
Recent work on business strategy considers the evaluation of company performance using frontier methods (Devinney et al., forthcoming). The present paper builds on that work to examine the extent to which company performance in one period impacts on business practices and hence performance in subsequent periods. We investigate this using a panel of annual data on some 4280 firms over the period 1983-2003, drawn from the Osiris data set of Bureau van Dijk. A data envelopment analysis is conducted to evaluate the efficiency of firms in converting inputs – in the form of shareholders’ funds, liabilities and costs - into sales. The efficiency scores are then modelled in a random parameter framework where one of the determinants of current period efficiency is the firm’s own lagged efficiency. In a parsimonious model, we find that the extent to which lagged efficiency affects current efficiency varies considerably from firm to firm. Some firms maintain a relatively constant level of efficiency period after period, while the efficiency of other firms is much more variable over time. Companies with extreme values of the random parameter (either low or high) are less likely than others to have high efficiency scores. These results are used to inform a number of qualitiative case studies of companies. Our evidence suggests that firms for which the random parameter is high tend to be long established enterprises operating in narrowly and clearly defined markets, and enjoying sustained periods of market stability; firms for which the random parameter is low tend to have had a turbulent recent past involving either rapid growth (including merger activity) or decline. Meanwhile efficiency is determined in part by the industry and country with which a firm is associated, and also by the opportunities to exploit scale economies.

frontier methods, business strategy

Abstract:
Using personnel records from two firms in the banking industry, duration models are estimated to examine separations in the context of Great Britain and Greece. We find that it is sustained, rather than instantaneous, performance that is linked to separations. In common with some earlier studies, we find qualified support for a u-shaped relationship between performance and separations, but only in the case of the British data. Both of the banks under investigation experienced substantial reorganisation activity over the time period considered, and we find that the year following this was characterised by increased separation propensities. While most of our findings are consistent across the firms in the two countries studied, we find that single men are more likely than their female counterparts to quit in Britain, but less likely to quit in Greece. We offer some suggestions about why this should be the case.

duration modelling, labour turnover, personnel economics

Abstract:
For many parameter vectors, the sustainable configuration of an industry where multiproduct firms have CES cost functions fails to imply the existence of a multiplicity of multiproduct firms.

Abstract:
We estimate a variety of models to evaluate costs in US higher education institutions. A novel feature of our approach involves the estimation of latent class and random parameter stochastic frontier models of the multiproduct cost function. This allows us fully to accommodate both the heterogeneity of institutions and the presence of technical inefficiencies. Our findings suggest that global economies could be achieved by effecting a reduction in the number of institutions providing undergraduate instruction, while increasing the number of institutions engaged in postgraduate activity.

costs, efficiency, stochastic frontier, latent class, random parameter

Abstract:
An empirical model is estimated which evaluates the determinants of labour market participation and occupational choice. The response of the latter to changes in expected earnings is somewhat weaker amongst women, especially married women, than amongst men. One interpretation of this finding is that occupational segregation is present.

Abstract:
This paper examines some potentially significant interactions between local housing and labor markets. We use an error correction model with equations explaining the average manufacturing wage, the unemployment rate, the labor force and the average house price in an urban area. Estimates are reported for the Hartford, Houston, Fort Lauderdale and Milwaukee areas using quarterly data for the 1980s. We find some evidence that unemployment and labor force changes affect house prices and that house prices have a significant effect on the size of the labor force.

Abstract:
This paper examines some potentially significant interactions between local housing and labor markets. We use an error correction model with equations explaining the average manufacturing wage, the unemployment rate, the labor force and the average house price in an urban area. Estimates are reported for the Hartford, Houston, Fort Lauderdale and Milwaukee areas using quarterly data for the 1980s. We find some evidence that unemployment and labor force changes affect house prices and that house prices have a significant effect on the size of the labor force.