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Why should governments intervene in education, and how effective is education policy

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Author Info
Marc van der Steeg ()
Abstract

This paper reviews arguments for government interference in the education sector and discusses the effectiveness of commonly used policy instruments. There are both efficiency and equity reasons for government intervention. Particular attention is paid to education spillovers (an efficiency motive). The empirical literature shows that there is little reason to argue for additional policy efforts to correct for externalities. There is some promising evidence, however, for non-pecuniary spillovers in the form of crime reduction and health improvements. With regard to the effectiveness of policy instruments, the paper discusses studies with a (quasi-)experimental design so that the causal impact of the policy can be identified. Early childhood interventions appear to be more effective than interventions in later stages of the education cycle.

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File URL: http://www.cpb.nl/eng/pub/cpbreeksen/memorandum/122/memo122.pdf
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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Memoranda with number 122.

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Date of creation: Jul 2005
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Handle: RePEc:cpb:memodm:122

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Related research
Keywords: private and social returns to education; education and equity; education policy; controlled and social policy experiments;

Find related papers by JEL classification:
I20 - Health, Education, and Welfare - - Education - - - General
I28 - Health, Education, and Welfare - - Education - - - Government Policy
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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References listed on IDEAS
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  1. Richard Blundell & Lorraine Dearden & Costas Meghir & Barbara Sianesi, 1999. "Human capital investment: the returns from education and training to the individual, the firm and the economy," Fiscal Studies, Institute for Fiscal Studies, vol. 20(1), pages 1-23, March. [Downloadable!]
  2. Angrist, Joshua D & Lavy, Victor, 2001. "Does Teacher Training Affect Pupil Learning? Evidence from Matched Comparisons in Jerusalem Public Schools," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 343-69, April. [Downloadable!] (restricted)
    Other versions:
  3. Borghans,Lex & Weel,Bas,ter, 2001. "Computers, Skills and Wages," Research Memoranda 019, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology. [Downloadable!]
    Other versions:
  4. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier. [Downloadable!] (restricted)
  5. Barbara L. Wolfe & Robert H. Haveman, 2002. "Social and nonmarket benefits from education in an advanced economy," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, issue Jun, pages 97-142. [Downloadable!]
  6. Janet Currie & Enrico Moretti, 2003. "Mother'S Education And The Intergenerational Transmission Of Human Capital: Evidence From College Openings," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1495-1532, November. [Downloadable!] (restricted)
  7. Joshua D. Angrist & Victor Lavy, 1999. "Using Maimonides' Rule To Estimate The Effect Of Class Size On Scholastic Achievement," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 533-575, May. [Downloadable!] (restricted)
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  10. Julie Berry Cullen & Brian A. Jacob & Steven Levitt, 2003. "The Effect of School Choice on Student Outcomes: Evidence from Randomized Lotteries," NBER Working Papers 10113, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Daron Acemoglu & Joshua Angrist, 1999. "How Large are the Social Returns to Education? Evidence from Compulsory Schooling Laws," Working papers 99-30, Massachusetts Institute of Technology (MIT), Department of Economics.
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  12. Andrea Bassanini & Stefano Scarpetta, 2001. "Does Human Capital Matter for Growth in OECD Countries?: Evidence from Pooled Mean-Group Estimates," OECD Economics Department Working Papers 282, OECD, Economics Department. [Downloadable!]
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    Other versions:
  14. Eric Canton & Bert Minne & Ate Nieuwenhuis & Marc van der Steeg, 2005. "Human capital, R&D, and competition in macroeconomic analysis," CPB Documents 91, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
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  15. Joshua Angrist & Victor Lavy, 2002. "New Evidence on Classroom Computers and Pupil Learning," Economic Journal, Royal Economic Society, vol. 112(482), pages 735-765, October. [Downloadable!] (restricted)
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  16. Joshua D. Angrist & Jonathan Guryan, 2003. "Does Teacher Testing Raise Teacher Quality? Evidence from State Certification Requirements," NBER Working Papers 9545, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  17. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change And Wage Inequality," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1055-1089, November. [Downloadable!] (restricted)
    Other versions:
  18. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1169-1213, November. [Downloadable!] (restricted)
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  19. James Heckman & Pedro Carneiro, 2003. "Human Capital Policy," NBER Working Papers 9495, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  20. Susan M. Dynarski, 1999. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion," NBER Working Papers 7422, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  21. Erik Canton & Andreas Blom, 2004. "Do student loans improve accessibility to higher education and student performance? An impact study of the SOFES program in Mexico," CPB Discussion Papers 33, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  22. Joshua D. Angrist & Victor Lavy, 2002. "The Effect of High School Matriculation Awards: Evidence from Randomized Trials," NBER Working Papers 9389, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
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