IDEAS home Printed from https://ideas.repec.org/p/ifs/ifsewp/05-11.html
   My bibliography  Save this paper

Education subsidies and school drop-out rates

Author

Listed:
  • Lorraine Dearden

    () (Institute for Fiscal Studies and Department of Social Science, University College London)

  • Carl Emmerson

    () (Institute for Fiscal Studies and Institute for Fiscal Studies)

  • Christine Frayne

    () (Institute for Fiscal Studies and European Commission (formerly IFS staff))

  • Costas Meghir

    () (Institute for Fiscal Studies and Yale University)

Abstract

This paper evaluates whether means-tested grants paid to secondary students are an effective way of reducing the proportion of school dropouts. We look at this problem using matching techniques on a pilot study carried out in England during 1999 and 2000 using a specially designed dataset that ensures that valid comparisons between our pilot and control areas are made. The impact of the subsidy is quite substantial with initial participation rates (at age 16/17) being around 4.5 percentage points higher. Full-time participation rates one year later are found to have increased by around 6.4 percentage points which is largely due to the EMA having a significant effect on retention in post compulsory education. These effects vary by eligibility group with those receiving the full payment having the largest initial increase in participation, whilst the effects for those who are partially eligible are only significantly different from the control group in the second year of the program. There is some evidence that the participation rate effect is stronger for boys, especially in the second year, and that the policy goes some way to reducing the gap in dropout rates between boys and girls. It is also clear that the policy has the largest impact on children from the poorest socio-economic background.

Suggested Citation

  • Lorraine Dearden & Carl Emmerson & Christine Frayne & Costas Meghir, 2005. "Education subsidies and school drop-out rates," IFS Working Papers W05/11, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:05/11
    as

    Download full text from publisher

    File URL: http://www.ifs.org.uk/wps/wp0511.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Richard Blundell & Lorraine Dearden & Barbara Sianesi, 2005. "Evaluating the effect of education on earnings: models, methods and results from the National Child Development Survey," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(3), pages 473-512, July.
    2. Stacy Berg Dale & Alan B. Krueger, 2002. "Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables," The Quarterly Journal of Economics, Oxford University Press, vol. 117(4), pages 1491-1527.
    3. Susan M. Dynarski, 2003. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion," American Economic Review, American Economic Association, vol. 93(1), pages 279-288, March.
    4. Harmon, Colm & Walker, Ian, 1995. "Estimates of the Economic Return to Schooling for the United Kingdom," American Economic Review, American Economic Association, vol. 85(5), pages 1278-1286, December.
    5. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    6. Costas Meghir & Mårten Palme, 2005. "Educational Reform, Ability, and Family Background," American Economic Review, American Economic Association, vol. 95(1), pages 414-424, March.
    7. Paul Johnson, 2004. "Education Policy in England," Oxford Review of Economic Policy, Oxford University Press, vol. 20(2), pages 173-197, Summer.
    8. James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," Review of Economic Studies, Oxford University Press, vol. 65(2), pages 261-294.
    9. James J. Heckman & Lance Lochner & Christopher Taber, 1999. "General Equilibrium Cost Benefit Analysis of Education and Tax Policies," NBER Working Papers 6881, National Bureau of Economic Research, Inc.
    10. 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.
    11. Stephen Cameron & Christopher Taber, 2000. "Borrowing Constraints and the Returns to Schooling," NBER Working Papers 7761, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Núria Rodríguez-Planas, 2010. "Longer-term Impacts of Mentoring, Educational Services, and Incentives to Learn: Evidence from a Randomized Trial in the United States," Working Papers 449, Barcelona Graduate School of Economics.
    2. Smyth, Emer & McCoy, Selina, 2009. "Investing in Education: Combating Educational Disadvantage," Research Series, Economic and Social Research Institute (ESRI), number RS006.
    3. Rodríguez-Planas, Núria, 2010. "Longer-Term Impacts of Mentoring, Educational Services, and Incentives to Learn: Evidence from a Randomized Trial," IZA Discussion Papers 4754, Institute of Labor Economics (IZA).
    4. Machin, Stephen & McNally, Sandra, 2008. "The literacy hour," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1441-1462, June.
    5. Pierre Lefebvre & Philip Merrigan, 2010. "Gender Gap in Dropping out of High School: Evidence from the Canadian NLSCY Youth," Cahiers de recherche 1044, CIRPEE.
    6. Carmen Aina, 2010. "The Determinants of Educational Attainment, University Drop-out and Time-to-Degree. A focus on Italy," Working Papers 132, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont.
    7. Lucas, Sterenn & Salladarré, Frédéric & Brécard, Dorothée, 2018. "Green consumption and peer effects: Does it work for seafood products?," Food Policy, Elsevier, vol. 76(C), pages 44-55.
    8. Morgenroth, Edgar & FitzGerald, John & FitzGerald, John, 2006. "Productive Sector," Book Chapters, in: Morgenroth, Edgar (ed.),Ex-Ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013, chapter 20, pages 257-277, Economic and Social Research Institute (ESRI).
    9. Steve Machin & Anna Vignoles, 2005. "Education Policy in the UK," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(4), pages 64-74, 01.
    10. Núria Rodríquez-Planas, 2010. "Mentoring, Educational Services, and Economic Incentives Longer-term Evidence on Risky Behaviors from a Randomized Trial," Working Papers 462, Barcelona Graduate School of Economics.
    11. Morgenroth, Edgar & FitzGerald, John & FitzGerald, John, 2006. "Summary and Conclusions," Book Chapters, in: Morgenroth, Edgar (ed.),Ex-Ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013, chapter 24, pages 317-333, Economic and Social Research Institute (ESRI).
      • Baker, Terence J. & FitzGerald, John & Honohan, Patrick & FitzGerald, John & Honohan, Patrick, 1996. "Summary and Conclusions," Book Chapters, in: Baker, Terence J. (ed.),Economic Implications for Ireland of EMU, chapter 12, pages 339-352, Economic and Social Research Institute (ESRI).
    12. Carmen Aina, 2010. "University Drop-out in Italy," Working Papers 134, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont.
    13. Maarten Cornet & Free Huizinga & Bert Minne & Dinand Webbink, 2006. "Successful knowledge policies," CPB Memorandum 158, CPB Netherlands Bureau for Economic Policy Analysis.
    14. Costas Meghir, 2006. "Dynamic models for policy evaluation," IFS Working Papers W06/08, Institute for Fiscal Studies.
    15. World Bank, 2008. "Kosovo - Youth in Jeopardy : Being Young, Unemployed, and Poor in Kosovo," World Bank Other Operational Studies 7895, The World Bank.
    16. Patricia J. Lucas & Karen McIntosh & Mark Petticrew & Helen M. Roberts & Alan Shiell, 2008. "Financial Benefits for Child Health and Well‐Being in Low Income or Socially Disadvantaged Families in Developed World Countries," Campbell Systematic Reviews, John Wiley & Sons, vol. 4(1), pages 1-93.
    17. Oreopoulos, Philip, 2007. "Do dropouts drop out too soon? Wealth, health and happiness from compulsory schooling," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2213-2229, December.
    18. Smyth, Emer & McCoy, Selina & Kingston, Gillian, 2015. "Learning from the Evaluation of DEIS," Research Series, Economic and Social Research Institute (ESRI), number RS39.
    19. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.
    20. Anderberg, Dan, 2013. "Post-compulsory education: Participation and politics," European Journal of Political Economy, Elsevier, vol. 29(C), pages 134-150.

    More about this item

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ifs:ifsewp:05/11. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Emma Hyman). General contact details of provider: http://edirc.repec.org/data/ifsssuk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.