How Responsive is Investment in Schooling to Changes in Redistributive Policies and in Returns?
AbstractThis paper uses an unusual pay reform to test the responsiveness of investment in schooling to changes in redistribution schemes that increase the rate of return to education. We exploit an episode where different Israeli kibbutzim shifted from equal sharing to productivity-based wages in different years and find that students in kibbutzim that reformed earlier invested more in high school education. This effect is stronger for males and is largely driven by students whose parents have lower levels of education. We also show that, in the long run, students in kibbutzim that reformed earlier were more likely to complete post-high school academic colleges. Our findings support the prediction that education is highly responsive to changes in the redistribution policy, especially for students from weaker backgrounds.
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Bibliographic InfoPaper provided by Competitive Advantage in the Global Economy (CAGE) in its series CAGE Online Working Paper Series with number 150.
Date of creation: 2013
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More information through EDIRC
kibbutzim; education; Redistributive Policies.;
Other versions of this item:
- Ran Abramitzky & Victor Lavy, 2011. "How Responsive is Investment in Schooling to Changes in Redistribution Policies and in Returns," NBER Working Papers 17093, National Bureau of Economic Research, Inc.
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-04-18 (All new papers)
- NEP-DEM-2014-04-18 (Demographic Economics)
- NEP-EDU-2014-04-18 (Education)
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