Incentive Effects on Efficiency in Education Systems’ Performance
AbstractIn the face of past ambiguous results on growth effects of education when measured through school attainment, some papers suggest that some countries may be unable to use productively their schooling output because of the scope of cronyism. We dig deeper and demonstrate that, in a stylized model, cronyism in the labour market, e.g. the ability to exert influence to gain high wage positions without merit, may impact heavily on the relationship between schooling inputs and cognitive skills, due to incentive effects. We then use a two-stage DEA approach to identify factors affecting inefficiency in education performance of OECD countries when the output is proxied by PISA scores. Along with other well known factors, a measure of corruption, our chosen proxy for cronyism, explains a substantial fraction of the inefficiency. This result suggests that, as in our model, in the presence of cronyism, incentives to cognitive skills acquisition are dampened. Analogously to developing countries but for different reasons, the best way to improve the education system performance in OECD countries may well be to fight corruption and increase transparency in labour access.
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Bibliographic InfoPaper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 270.
Length: 22 pages
Date of creation: Oct 2012
Date of revision:
education; corruption; technical efficiency; DEA.;
Find related papers by JEL classification:
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-17 (All new papers)
- NEP-EDU-2012-11-17 (Education)
- NEP-EFF-2012-11-17 (Efficiency & Productivity)
- NEP-HRM-2012-11-17 (Human Capital & Human Resource Management)
- NEP-LAB-2012-11-17 (Labour Economics)
- NEP-URE-2012-11-17 (Urban & Real Estate Economics)
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