ECONOMICS OF EDUCATION
ECONOMICS 4250
OUTLINE OF NOTES
DAVID B. MUSTARD

Economics 4250H Homepage
-------------------------------------------------------- Tuesday 8 January 2008
Administration
    1.  Syllabus

    2.  Personal Introduction
        a. Education-Why Economics?
        b. Research
        c. Family
        d. Background/Interests
        e. Requests

    3.  Classroom Dynamics
        a. I will ask you many questions in class.
        b. Reading--All students are expected to come to class ready to discuss the day’s reading. Participation is an essential component of the course.
        c. Students' Substantive Questions. Never hesitate to ask substantive questions about the material - either in class or during office hours. At the beginning of each class I will try to ask whether anyone has questions about the material from previous lectures or from the reading.
        d. Students' Administrative Questions. To allow me to help people most effectively with the substantive issues, if you have administrative questions, please go to 1) Syllabus; 2) Web site; 3) Classmates; 4) Me.

    4. How to do well
        a. Come to class
        b. Do reading as it is being covered in class
        c. Learn tools of economics - graphs, words and equations
        d. Use my class outlines on web site
        e. Talk to me before, rather than after exams

    5. Class Website

    6. Roll

    7. Quiz
1. Introduction to Economics

    Required Reading Becker, Gary S. "Nobel Lecture: The Economic Way of Looking at Life," The Journal of Political Economy, Vol. 101, Issue 3 (June 1993): 383-409. Just read Section I (Introduction) (JSTOR)
    Jessica E. Vascellaro, "The Hot Major for Undergrads is Economics." Wall Street Journal, Tues. July 5, 2005.

A.  What is economics?
    1. Misconception
    2. Definition
    3. Principle/Theory
    4. Goal

------------------------------------------------------- Thursday 10 January 2008
B. What does economics provide for the study of education policy?
    1. Theory--people respond to incentives
    2. Understanding financial implications
    3. Implications of market structure
    4. Evaluation of statistical evidence--See Section 2C below

C. Discsussion of Becker article


2. What Does Schooling Do?
   Introductory Questions

    A. Human Capital
      Required Reading Becker, Gary S. "Nobel Lecture: The Economic Way of Looking at Life," The Journal of Political Economy, Vol. 101, Issue 3 (June 1993): 383-409. Just read Section IV (Human Capital) (JSTOR)
        1. Definition
        2. History/Development of HC
            Journal of Human Capital
        3. How and where do you invest in HC?
        4. Types of HC
        5. What other factors influence HC investment decisions?
        6. Applications/Examples

------------------------------------------------------ Tuesday 15 January 2008
   B. Signaling
      Required Reading Andrew Weiss, “Human Capital vs. Signalling [sic] Explanations of Wages,” The Journal of Economic Perspectives, Vol. 9, Issue 4 (Autumn, 1995): 133-154 (JSTOR)
        1. Definition
        2. Differences between signaling and HC
        3. Evidence for signaling
        4. What are the policy implications of signaling?      


   C. Non-Pecuniary Benefits and Social Externalities.
      Required Reading Robert H. Haveman. and Barbara L. Wolfe, “Schooling and Economic Well-Being: The Role of Nonmarket Effects” Journal of Human Resources, Vol. 19, n3 (Summer 1984): 377-407 (JSTOR). Concentrate on Section I. Can skim Section II.
        1. Why do we subsidize education?
        2. Market failures
            a. Externalities
            b. Public Goods
            c. Information Assymetries
            d. Non-Competitive behavior/Monopoly power-Table 1
---------------------------------------------------- Thursday 17 January 2008
        3. Examples of non-marketed effects--see table
        4. Estimating the magnitude and significance of non-market effects

    D. Earnings and Rates of Return
      Required Reading Frank Levy and Richard J. Murnane, “US Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations.” Journal of Economic Literature, Vol. 30, No. 3 (September 1992): 1333-1381 (JSTOR). Read all sections but just skim Sections IV C & D (can skip algebra parts).
        1. How is inequality measured? See slides on inequality
        2. What is the long-term trend in overall earnings inequality?
---------------------------------------------------- Tuesday 22 January 2008
        3. Along what dimensions is inequality changing?
            a. Total--Is there too much inequality?
            b. Race
            Optional Reading
                1) Neal and Johnson. 1996. "The Role of Premarket Factors in Black-White Wage Differences", Journal of Political Economy, Vol. 104 (October): 869-895.
                2) Neal. 2004. "The Measured Black-White Wage Gap Among Women is Too Small", Journal of Political Economy, Vol. 112 (February): S1-S28.
            c. Gender
            Optional Reading
                Konstantopoulos and Constant "Gender Differences Across the Earnings Distribution" IZA, Working Paper #1425.
            d. Ability/Skill
             Optional Reading
                Juhn, Chinhui, Kevin M. Murphy, and Brooks Pierce. 1993. “Wage Inequality and the Rise in the Returns to Skill,”Journal of Political Economy, vol. 101, no. 3 (June), 410-442.
                Rosen, Sherwin. “The Economics of Superstars,” American Economic Review, vol. 71, 845-858.
            e. Education
            f. Experience/Age
            g. Sector
        5. What is responsible for the observed trends (shifts in S&D; institutions)?
            a. Education
            b. Compensating Differences and explaining differences in wage gaps.
            c. Ability
            d. Other factors
        6. To what extent is there mobility and freedom of opportunity? Can people increase economic performance over time?
        7. Absolute vs. Relative comparisons. What is happening to those in poverty?
             How is poverty calculated?

------------------------------------------------------- Tuesday January 29, 2008
3. Econometrics Overview
      Required Reading David B. Mustard. 2001. “Racial, Ethnic and Gender Disparities in Sentencing: Evidence from the US Federal Courts.” Journal of Law and Economics, Vol. 44, No. 1: 285-314. Read through page 304. Pay particular attention to pages 296-304. You do not need to read to remember the substance, but to think about how to set up a regression, what to do with data, and what that results of a regression mean.

    A. Hypothesis Testin
    B. Regression techniques
        1. Ordinary Least Squares
        2. Logit/Probit
    C. Coefficient Estimates
    D. Standard Errors
    E. T-Statistics and Statistical Significance
    F. Examples
------------------------------------------------------- Thursday January 31, 2008
    G. These same methods are used for evaluating educational policy--effect of class size on student SAT scores, the effect of higher per pupil spending on likelihood of high school graduation, etc.
    H. Data problems
        1. Omitted variable bias
        2. Selection bias
        3. Survey  bias
        4. Endogeneity/Simultaneity
        5. Small sample problems  

4. Primary and Secondary Policy Making: Traditional Educational Reforms
    A. Overview: The Coleman Report and A Nation at Risk
        Required Reading
        National Commission on Excellence in Education, A Nation At Risk (Washington: Government Printing Office, 1983). You do not have to read the appendices. Focus on the following sections "Introduction," "A Nation At Risk," "Findings", and "Recommendations"
        1. Political and educational context of National Commission
        2. Commission's Sources
        3. Commission's Findings
        4. Commission's Recommendations

    B. The Market for Primary and Secondary Schooling
        Who are the players in the educational markets?
        1. Elementary and Secondary
        2. Higher Education

    C. Economists' View of Education
        1. Education production functions-Identfying the relationship between educational inputs and outputs.
        2. Theory
        3. Data--what are the relevant outcome variables?
        4. Results

---------------------------------------------------- Tuesday 5 February 2008
    D. Increased Spending
    Required Reading
    Eric A. Hanushek. 2003. "The Failure of Input-Based Schooling Policies." The Economic Journal, Vol. 113 (February): F64-F98.
    Optional Reading
    Eric A. Hanushek. 1986. "The Economics of Schooling: Production and Efficiency in Public Schools." Journal of Economic Literature, Vol. 24, No. 3 (Sep): 1141-1177.
    Eric A. Hanushek. 1996. "Measuring Investment in Education." Journal of Economic Perspectives, Vol. 10, No. 4 (Autumn): 9-30.
        1. Trends in educational output (grades, test scores)--See slides on trends   
        2. Trends in educational cost
        3. Aggregate data
            a) US
            b) International
            c) What can we infer from aggregate data?
        4. Econometric data
            a) What is the sample?
            b) What are the results?
        5. Differences in quality of studies
---------------------------------------------------- Thursday 7 February 2008
        6. Interpretation of these relationships

    E. Effect of Class Size on Student Outcomes
    Required Reading
    Virginia Postrel, "Economic Scene: Smaller Classes Don't Necessarily Equal Better Education," New York Times, February 22, 2001.
    Caroline M. Hoxby. 2000. "The Effects of Class Size on Student Achievement: New Evidence from Population Variation." Quarterly Journal of Economics, Vol. 115 (Nov): 1239-1285. Read only Sections I, II, IV (Data), VII (Interpretation), and VIII (Conclusion).

    Optional Reading
     Ludger Wößmann and Martin R. West, 2002. "Class-Size Effects in School Systems Around the World: Evidence from Between-Grade Variation in TIMSS"  Program on Educational Policy and Governance, Harvard University. Conclusion summarizes central results.
        1. Introduction
        2. What are the trends in changes in class-size?
        3. What are the results about how class size affects student performance?
        4. What problems exist in estimating the relationship between class size and student performance?
        5. How do we estimate the impact of the effect of class size on student performance?
        6. What are the necessary conditions for class size reductions to increase student performance
        7. What theory explains the empirical results on class size?
        8. What are the costs of class-size reductions?
---------------------------------------------------- Tuesday 12 February 2008
        9. Examples of successful reform
        10. Tennessee's Student Teacher Achievement Ratio (STAR)
        11. Summary
    F. How Important are Teachers?
    Required Reading--JUST THE INTRODUCTIONS OF THESE ARTICLES
    Clotfelter, Charles T., Helen F. Ladd and Jacob Vigdor. December 2005. "Who Teaches Whom? Race and the Distribution of Novice Teachers." Economics of Education Review. Vol. 24: 377-392.
    Rivkin, Steven G., Eric A. Hanushek, and John F. Kain. "Teachers, Schools, and Academic Achievement." Econometrica, Vol. 73, No. 2 (March, 2005), 417–458.
        1. Introduction
        2. What are the trends in teacher certification, education, and experience?
        3. What are the trends in student performance?
        4. How do we estimate the impact of teacher characteristics on student performance?
        5. What problems exist in estimating the relationship between teacher characteristics and student performance?
        6. Effects of Teacher Experience
---------------------------------------------------- Thursday 14 February 2008
    MIDTERM #1
---------------------------------------------------- Tuesday 19 February 2008
         7. Effects of Teacher Education
        8. Effects of Teacher Certification
        Required Reading: Angrist, Joshua D. and Jonathan Guryan. February 2005. "Does Teacher Testing Raise Teacher Quality? Evidence from State Certification Requirements." IZA (Institute for the Study of Labor) Discussion Paper No. 1500.
            a. Introduction
            b. History
            c. Objective
            d. Theory
            e. Results
            f. Certification in other fields
            Required Reading:  Kleiner, Morris M. "Rule of Law: Our Guild-Ridden Economy." Wall St. Journal, October 15, 2005, p. A7.
            g. Mandatory vs. voluntary certification
            h. National vs. state certification

---------------------------------------------------- Thursday 21 February 2008
   Go over MIDTERM #1
-----------------------
        9. Effects of Teacher characteristics--race, gender, ethnicity
        Required Reading--JUST THE INTRODUCTIONS OF THESE ARTICLES
         Eric A. Hanushek, John F. Kain, Daniel M. O'Brien, and Steven G.Rivkin. 2005. "The Market for Teacher Quality." National Bureau of Economic Research Working Paper #11154. February.
         Thomas S. Dee. 2005. "A Teacher Like Me: Does Race, Ethnicity or Gender Matter?" American Economic Review, May.
       Thomas S. Dee. 2004. "Teachers, Race, and Student Achievement in a Randomized Experiment." Review of Economics and Statistics, Vol. 86, No. 1: 195-210.

            a. Theory
            b. Existing patterns of teacher-student distribution
            c. Data
            d. Results
            e. Explanations
---------------------------------------------------- Tuesday 26 February 2008
        10. Effects of Teacher Test Scores
        11. Effects of Teacher unionization
            a. Theory of influence on student outcomes
            b. Results
            c. Other effects
                    Required Reading: "Teacher's Pets." Wall St. Journal, January 3, 2008, p. A24.
        12. Effects of Teacher Salaries 
        Required Reading:
          Hoxby, Caroline M. and Andrew Leigh. "Wage Distortion." Education Next. Spring 2005, pages 50-56.
        Tomsho, Robert. "More Districts Pay Teachers for Performance." Wall St. Journal, March 23, 2008, p. B1.

        Optional Reading-can just look briefly at abstracts or conclusions
        Hoxby, Caroline M. and Andrew Leigh. "Explaining the Decline of Teacher Aptitude in the United States." Harvard University and National Bureau of Economic Research Working Paper, December 2003.
        13. Summary
---------------------------------------------------- Thursday 28 February 2008

    G. Equalization of School Funding
    H. Lessons from traditional reforms
        1. Why is it difficult to make educational reforms?
        2. What principles of reform can economists contribute to the evaluation of schooling?
        3. What is necessary for effective educational reform?
        4. Some possibilities for introducing reform


5. Primary and Secondary Policy Making: Recent Educational Reforms
    A. Deregulation and Increasing Competition in School
        a. Montessori Schools
        b. Waldorf Schools
        c. National Home Education Research Institute (NHERI)
    B. Charter Schools
        Required Reading
            Hoxby, Caroline M. "Achievement in Charter Schools and Regular Public Schools in the United States: Understanding the Differences." Harvard University and National Bureaue of Economic Research Working Paper, December 2004.
            Nelson, F. Howard, Bella Rosenberg, Nancy Van Meter. August 2004. "Charter School Achievement on the 2003 National Assessment of Educational Progress." American Federation of Teachers.
            Moore, Russ. "Charter School Expands Success Beyond College Prep." Georgia Public Policy Foundation, June, 17, 2005.
            Bell, Griffin. "Higher Expectations for Higher Education." Georgia Public Policy Foundation, Jan. 20, 2008.
           Online learning community for charter schools

            a. What is a charter?
---------------------------------------------------- Tuesday 4 March 2008
            b. Who is eligible to start charters?
            c. What is the history/beginning of charters?
            d. Trends (number of charters and students)
            e. What are the criticims against school choice?
            f. What are the reasons for school choice (charter schools, vouchers, ...)?
 ---------------------------------------------------- Thursday 6 March 2008
            g. How do we measure the effects of charter schools?
              h. What effect do charter schools have?

---------------------------------------------------- Tuesday 18 March 2008
    C. Vouchers
         Required Reading Paul E. Peterson, "Gains of Black Students in Voucher Schools," May 8, 2000
            Paul E. Peterson, "School Vouchers Raise African American Test Scores," October 9, 2000
            National Education Association Response to Bush Plan, "Vouchers Ignore Bush's Chance to 'Unite' Rather Than 'Divide,'" Jan. 23, 2001
           Optional Reading-can just look briefly at abstracts or conclusions
            Caroline Hoxby "How School Choice Affects the Achievement of Public School Students"
            "School Choice and School Productivity (or, Could School Choice be a Tide the Lifts All Boats?)"
            "How School Choice Affects the Achievement of Public School Students"
            Havard's Program on Education Policy and Governance (in the Kennedy School of Public Affairs) Working papers -- there is an extensive series of evaluations of voucher programs throughout the nation
            Rouse, Cecilia Elena, Jane Hannaway, Dan Goldhaber, and David Figlio. 2007. "Feeling the Florida Heat? How Low-Performing Schools Respond to Voucher and Accountability Pressure." National of Bureau of Economics Research Working Paper #13681.
            a. Definition
            b. Historical Context
            c. Timing of adoption
                1) Publicly funded
                    a) Milwaukee
                    b) Cleveland
                    c) Florida A+
                    d) Washington DC
                2) Privately funded
                    a) San Antonio
                    b) Washington, DC
                    c) New York City
                    d) Children's Scholarship Fund
           d. Measurement issues in evaluating vouchers
           e. Reasons to oppose--see above for charter schools
           f. Reasons to support--see above for charter schools
           g. Constitutionality "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof, or abridging the freedom of speech, or of the press; or the right of the people peacably to assemble, and to petition the Government for a redress of grievances."
         Optional Reading Michael McConnell, "School Vouchers," Slate, Tuesday, Dec. 8, 1998.
            Kathleen M. Sullivan, "School Vouchers," Slate, Friday, Dec. 18, 1998.
           Michael McConnell, "School Vouchers," Slate, Mon., Dec. 28, 1998.
            Kathleen M. Sullivan, "School Vouchers," Slate, Wed., Dec. 30, 1998.
           Michael McConnell, "School Vouchers," Slate, Wed., Jan. 13, 1999.
         Zelman, et al. v. Simmons-Harris et al. - June 2002 Supreme Court decision on Cleveland voucher program
---------------------------------------------------- Thursday 20 March 2008
           h. Results of voucher/choice studies--see Tables
                1) On existing public schools
                   a) Outputs--Achievement
                   b) Inputs and Outupts--Productivity
                   c) Inputs
---------------------------------------------------- Tuesday 25 March 2008
                2) On Voucher takers
                   a) Non-academic outcomes
                   b) Academic outcomes

---------------------------------------------------- Thursday 27 March 2008
  MIDTERM #2
---------------------------------------------------- Tuesday 1 April 2008
      D. High-stakes testing/ No Child Left Behind
        Required Reading
        "Point/Counterpoint." 2005. Journal of Policy Analysis and Managment. Vol. 24, Number 1 (Winter): 167-178.
        American Educational Research Association Statement on High-Stakes Testing
        International Reading Association Statement on High-Stakes Testing, August, 1999

        Optional Reading-can just look briefly at abstracts or conclusions
        No Child Left Behind page. Review the goals, objectives, etc. of the program. 
        Brian Jacob, "The Impact of High-Stakes Testing on Student Achievement: Evidence from Chicago."
        J. Catterall, "Standards and School Dropouts: A National Study of Tests Required for High School Graduation," American Journal of Education, Vol. 98 (November): 1-34.
        David Figlio and Maurice Lucas, "What's in a Grade? School Report Cards and House Prices," National Bureau of Economic Research Working Paper #8019.
         Stephen J. Dubner, "The Probability That a Real-Estate Agent Is Cheating You (and Other Riddles of Modern Life)," The New York Times, 3 August 2003,
Late Edition – Final.
        "Testing for Tracking, Promotion and Graduation," by Jay P. Heubert and Robert M. Hauser, Editors, National Academy Press, Washington, D.C. 1999--read only from "Executive Summary" down.
        American Psychological Association "Appropriate Use of High-Stakes Testing in Our Nation's Schools"

            a. What is high-stakes testing?
            b. Why implement high-stakes testing?
            c. What are criticisms of high-stakes testing?
            d. How do we measure the impact?
            e. Evidence from high-stakes testing
---------------------------------------------------- Thursday 3 April 2008

    E. Educational Management Organizations (EMOs)/for profit institutions
        Required Reading: None
            a. EMOs Basics
                   1) Definition            
                2) Trends
            b. Reasons to Support EMOs
            c. Reasons to question EMOs
            d. Major Market Players
                1) Edison Schools
                2) Imagine Schools (merged with Beacon Education Management in 2004, which was formerly Alternative Public Schools).
                3) Association of Education Practitioners and Providers
                4) The TesseracT Group (formerly Education Alternatives Inc.).
                5) Nobel Learning Communities, Inc.
            e. Evaluations of EMOs
                1) Cookson
                2) American Federation of Teachers
                3) Western Michigan

---------------------------------------------------- Tuesday 8 April 2008
    REVIEW MIDTERM #2

6. Higher Education 
    A. Overview/Introduction
        1. Supply of higher education
        2. Demand of higher education
        3. Government involvement
        4. Differences from primary and secondary
        5. Differences from higher education in the world
        6. Participation
---------------------------------------------------- Thursday 10 April 2008
    B. Historical and Contextual Background
        Required Reading
           Goldin and Katz, “The Shaping of Higher Education: The Formative Years in the United States, 1890 to 1940,” Journal of Economic Perspectives 13 (Winter 1999), pp. 73-62
        1. Change in enrollment rates
        2. Trends in the development of colleges and universities
        3. What explains the trends?
        4. Differences between private and public institutions
        5. What determines state support for higher education?
        6. History of student financing in the US

  ---------------------------------------------------- Tuesday 15 April 2008
    C. Recent Trends
        Required Reading
           Cornwell, Christopher M. and David B. Mustard. “Assessing Public Higher Education in Georgia at the Start of the 21st Century,” in What's Happening to Public Higher Education, Edited by Ronald Ehrenberg, Greenwood Press: American Council for Education, forthcoming.
       1. Funding (State, federal, tuition)
       2. Tuition
       3. Significant growth in merit aid programs
       4. Experimentation
       5. Increase in funding students relative to institutions
       6. Affirmative action

    D. Racial Differences in Education
    "Discrimination in education is symbolic of all the more drastic discrimination in which Negroes suffer. In the American life, the equal protection clause in the Fourteenth Amendment furnishes the key to ending separate schools." Charles Hamilton Houston
        1. Discrimination - Economic Theory of Discrimination
      Required Reading Becker, Gary S. "Nobel Lecture: The Economic Way of Looking at Life," The Journal of Political Economy, Vol. 101, Issue 3 (June 1993): 383-409. Just read Section II (Discrimination Against Minorities) (JSTOR)
            a. Beckerian discrimination
                1) Definition
                2) Discrimination coefficients
                3) Examples of Beckerian discrimination
                    a) Employer
                    b) Consumer
                    c) Employee
                4) Implications of discriminatory behavior
---------------------------------------------------- Thursday 17 April 2008

    PAPERS PRESENTED

---------------------------------------------------- Tuesday 22 April 2008
   PAPERS PRESENTED
            b. Statistical discrimination
                1) Definition
                2) Examples
        2. Historical/Legal context of race in education
            1896 Plessey v. Ferguson
            1954 Brown v. Board of Education of Topeka, Kansas
            Increased use of quotas
            1974 DeFunsis v. Odegaard
            1978 Bakke v. California Board of Regents
            1988 US Dept of Education--Berkeley--UCLA
            1992 US DoE and Berkeley's Boalt Hall
            1994 CA Gov. Pete Wilson proposed dropping race sensitive admissions policies
            1995 CA Board of Regents support ban, effective 1996
            1996 CA passes Prop. 209
            1996 Hopwood v. Texas
            1998 Washington passes I-200
            2001 11th Circuit rules against UGA
            2002 Grutter/Gratz v. Bollinger in 6th Circuit
            2003 Grutter/Gratz v. Bollinger in USSC
---------------------------------------------------- Thursday 24 April 2008
    PAPERS PRESENTED
        3. Affirmative Action

        Required Reading "Race Sensitive Policies in Admissions: A 30-year Study," PBS Frontline.
        "Interview with William G. Bowen," PBS Frontline.
        "Interview with Derek Bok," PBS Frontline.
        "Interview with Abigail Thernstrom," PBS Frontline
        Thomas Sowell, "Racial Quotas in College Admissions: A Critique of the Bowen and Bok Study," Hoover Institution Essays in Public Policy, 1999, no. 3.
        Ward Connerly, "One Nation, Indivisible," Hoover Digest, 2001, no. 1.
        Sara Rimer and Karen W. Arenson, "Top Colleges Take More Blacks, but Which Ones?" The New York Times, June 24, 2004.


         Optional Reading-can just look briefly at abstracts or conclusions
        Richard H. Sander. 2004. "A Systematic Analysis of Affirmative Action in American Law Schools." Stanford Law Review, (Nov.): 368-483.

               a. What data did Bowen and Bok use?
               b. What did Bowen and Bok conclude?
               c. Criticisms of Bowen-Bok.
               d. Other potential strategies to promote diversity
                  1) X% rules
                  2) Preferential admissions based on SES factors

------------------------------------------------------- COURSE SUMMARY
    1. People respond to incentives--in education and everywhere!
    2. Because people respond to incentives there are very important policy implications
        Differences between intent and outcome
        Unintended consequences
    3. I try to cover policy but not be political
    4. How do you measure policy impacts? What constitutes good evidence? weak evidence?
        Measurement error
        Selection bias
        Reverse causality
        Omitted variable bias
    5. Equip you to make informed decisions

------------------------------------------------------- Material below here will not be covered on the final

    E. Merit Based Aid
             Required Reading Cornwell, Christopher M. and David B. Mustard "Georgia's HOPE Scholarship Program: Enrollment Gains and Lottery Finance." Insights on Southern Poverty. Fall, Vol. 1, No. 3: pages 5-8.
       1. Introduction
       2. Growth of merit aid programs
       3. Program rules
          a. Obtain
          b. Retain
       4. Financing of merit aid programs
       5. How do merit programs affect enrollment?
          a. How do we measure the effect of HOPE?
          b. How should merit aid affect enrollment?
             By type institution type, race, etc.
        6. Merit aid and stratification by ability
         7. How do merit programs affect behavior at college?
           Required Reading Cornwell, Lee, and Mustard "The Effects of Merit-Based Financial Aid on Course Enrollment, Withdrawal and Completion in College".
            a. Retention rules
            b. Incentives for behavior
                1) Increase effort and human capital
                2) Strategic course taking
            c. Difference-in-differences
            d. Effects at different ability levels
            e. Effects over time
       8. Do  merit programs retain students?

Merit Aid issues
        2. Reasons for implementing merit aid programs
        3. McPherson and Schapiro discuss merit aid as a prisoner's dilemma
        4. Is merit aid socially productive or unproductive educational spending?
        5. What is the optimal way to distribute students across schools?
        6. Institutional practices and merit aid
        7. Individual recipients of merit aid
 
  C. Access and Choice
         Required Reading
            "Why Zell Miller Screws the Democrats. Man from HOPE," The National Review, by Jason Zengerle, 2 Feb. 2001
         Required Reading
            McPherson and Schapiro, The Student Aid Game, Chapters 3-6.
            Cornwell, Mustard and Sridhar, "The Enrollment Effects of Merit-Based Financial Aid: Evidence from Georgia's HOPE Scholarship"--Sections 1-3, 4.1, 4.4, 5 (conclusion)
            Boehner, Representative John A. and Representative Howard P. "Buck" McKeown, "The College Cost Crisis: A Congressional Analysis of College Costs and Implications for America's Higher Education System,"

        1. Definitions of Access and Choice
        2. Why should we be concerned about access?
        3. Changing costs and benefits of college degree and changing enrollment rates
            a. Tuition costs
            b. Opportunity costs
        4. How has funding for college changed? ---- Table 2
            a. State and local
            b. Federal
            c. Tuition
            d. Gifts and Edowments
            e. Other
        5. Effects across income levels
           a. Access and choice
            b. Elasticity of Demand
            c. Differences by institution type

       7. Future of College Affordability
            a. Demand Side
            b. Supply/Finance Side
            c. How will institutions respond?
            d. McPherson and Schapiro’s exhortation

    D. Strategic Responses - students and institutions
         Required Reading
            McPherson and Schapiro, The Student Aid Game, Chapters 7-9.
            Albert B. Crenshaw, "Price Wars on Campus; Colleges Use Discounts to Draw Best Mix Of Top Students, Paying Customers,"
The Washington Post, 15 October 2002, p. A1.

        1. How do government subsidies affect the price of colleges?
            a. Theory of subsidies
-------------------------------------------------------
            b. Federal subsidies and the Bennet Hypothesis
            c. Federal subsidies under the Clinton administration
            d. State subsidies--merit based aid
            e. Alternatives
        2. Institutional responses in admission and financial aid policies
            a. Need-blind admissions with various forms of financial aid
            b. Admission is a function of ability to pay
            c. Admission is a function of likelihood of attending
            d. Early acceptance/Early admit



--------------
    Review for Final
        How should we subsidize higher education?

------------------------------------------------------- Extra material--not covered in course

    E. Course Material Overview
        Clarke County School District, Athens Community, and University of Georgia in a Partnership for Community Learning Centers
 

        (packet) Julian R. Betts, "Is There a Link Between School Inputs and Earnings? Fresh Scrutiny of an Old Literature." In Does Money Matter? The Effect of School Resources on Student Achievement and Adult Success, edited by Gary Burtless, Washington, D.C.: pages 141-191.
        (packet) John E. Chubb and Terry M. Moe, Politics, Markets and America's Schools, The Brookings Institution, Washington, D.C., Chapter 6.

    Jeffrey Groen and Michelle J. White, "In-State versus Out-of-State Students: The Divergence of Interest between Public Univerisities and Some State Governments."
    John Bound, Jeffrey Groen, Gabor Kezdi and Sarah Turner, "Trade in University Training: Cross-State Variation in the Production and Use of College-Educted Labor," National Bureau of Economic Research Working Paper #8555.
   Ronald G. Ehrenberg and Christopher L. Smith, "Within State Transitions from 2-Year to 4-Year Public Institutions," National Bureau of Economic Research Working Paper #8792.
    Stacy Berg Dale and Alan B. Krueger, "Estimating the Payoff to Attending A More Selective College: An Application of Selection on Observables and Unobservables," National Bureau of Economic Research Working Paper #7322.
   Peter Arcidiacono and Sean Nicholson, "The Mirage of Peer Effects: Evidence from U.S. Medical Schools," Working Paper.

Student Presentations
    Eric Hanushek, "Publicly Provided Education," National Bureau of Economic Research Working Paper #8799.

        Diana B. Henriques and Jacques Steinberg, "Woes for Company Running Schools," New York Times, 14 May 2002.

    Hoxby, Caroline M. "How School Choice Affects the Achievement of Public School Students." Harvard University and National Bureaue of Economic Research Working Paper, December 2001.

 
Note: change outline so there is a first wave and second wave or educational reforms.

Charter Schools
            Chester E. Finn Jr., "Charter Schools in Action," April 10, 2000
            Caroline Hoxby, "What Parents Choose When Given Choices," March 20, 2000
 

-------------------------------------------------------- Skip in 2005
    C. Racial Differences
        Required Reading June O'Neill, "The Role of Human Capital in Earnings Differences Between Black and White Men," Journal of Economic Perspectives, Vol. 4, No. 4 (Fall 1990), pp. 25-45. (JSTOR)
         1. Wages
            a. Historical trends of inequality
            b. Explanations for changing inequality
        2. Education

       3. Test Score Differences
        Required Reading "The Test Score Gap," PBS Frontline.
            Christopher Jencks and
            a. Definition
            b. Size of gaps
            c. What explains the test score gaps?

    D. Potential Solutions
        1. Reparations
            a. What are reparations
            b. Examples of reparations
            c. Reasons to support
            d. Reasons to be critical
-------------------------------------------------------- End Skip in 2005

Names Research
    a. Bertrand, Marianne and Sendhil Mullainithan, "Are Emily and Brendan More Employable than Latoya and Tyrone? Evidence on Racial Discrimination in the Labor Market from a Large Randomized Experiment,” September 2004, American Economic Review. http://post.economics.harvard.edu/faculty/mullainathan/papers/emilygreg.pdf.
    b. Fryer, Roland G., Jr. and Steven D. Levitt, "The Causes and Consequences of Distinctively Black Names." Quarterly Journal of Economics, Vol. 119, Issue 3, August 2004. http://post.economics.harvard.edu/faculty/fryer/papers/qjec_vol119_3.pdf
    c. David Figlio. "Names, Expectations, and Black Children's Achievements" http://bear.cba.ufl.edu/figlio/. Once at homepage go to "Words" link. This is the first paper.

        6. Gender Differences in Education
        Required Reading
            Hacker, Andrew. "How the B.A. Gap Widens the Chasm Between Men and Women." The Chronicle of Higher Education, June 20, 2003.
            Sommers, Christina Hoff. "The War Against Boys, Part I." The Atlantic Monthly.  Volume 285, No. 5; May 2000, pp. 59-74.
            Sommers, Christina Hoff. "The War Against Boys, Part II." The Atlantic Monthly.  Volume 285, No. 5; May 2000, pp. 59-74.
            Sommers, Christina Hoff. "The War Against Boys, Part III." The Atlantic Monthly.  Volume 285, No. 5; May 2000, pp. 59-74.
            Sommers, Christina Hoff. "The War Against Boys, Part IV." The Atlantic Monthly.  Volume 285, No. 5; May 2000, pp. 59-74.
            "Exchange about The War Against Boys," The Atlantic Monthly.  August 2000; Letters; Volume 286, No. 2; pp. 6-13.

            Alyssa Abkowitz, "Bulldog Barbie: How UGA Became White Chick U" Creative Loafing, Feb. 3, 2005.
    Kremer, Michael, Edward Miguel, and Rebecca Thornton. 2005. "Incentives to Learn" Education Next.
   

            1) What are the trends in educational attainment by gender?    
            2) What accounts for these trends in educational attainment?
            3) What are some of the implications of these trends?
-------------------------------------------------------- End Skip in 2005

V. Higher Education
         Required Reading
           Goldin and Katz, “The Shaping of Higher Education: The Formative Years in the United States, 1890 to 1940,” Journal of Economic Perspectives 13 (Winter 1999), pp. 73-62
            Cornwell, Lee, and Mustard "The Effects of Merit-Based Financial Aid on Course Enrollment, Withdrawal and Completion in College".

    A. Overview/Introduction
        1. Supply of higher education
        2. Demand of higher education
        3. Government involvement
        4. Differences from primary and secondary/Differences from higher education in the world
        5. Participation

    B. Historical and Contextual Background

        1. Change in enrollment rates
        2. Trends in the development of colleges and universities
        3. What explains the trends?
        4. Differences between private and public institutions
        5. What determines state support for higher education?
        6. History of student financing in the US

    C. Access and Choice
         Required Reading
            McPherson and Schapiro, The Student Aid Game, Chapters 3-6.
            Cornwell, Mustard and Sridhar, "The Enrollment Effects of Merit-Based Financial Aid: Evidence from Georgia's HOPE Scholarship"--Sections 1-3, 4.1, 4.4, 5 (conclusion)
            Boehner, Representative John A. and Representative Howard P. "Buck" McKeown, "The College Cost Crisis: A Congressional Analysis of College Costs and Implications for America's Higher Education System,"

        1. Definitions of Access and Choice
        2. Why should we be concerned about access?
        3. Changing costs and benefits of college degree and changing enrollment rates
            a. Tuition costs
            b. Opportunity costs
        4. How has funding for college changed? ---- Table 2
            a. State and local
            b. Federal
            c. Tuition
            d. Gifts and Edowments
            e. Other
        5. Effects across income levels
           a. Access and choice
            b. Elasticity of Demand
            c. Differences by institution type

         6. HOPE Scholarship and merit-based aid
            a. Access-choice
            b. Methodology
            c. Enrollment changes
                1) Total
                2) Public 4-year
                3) Private 4-year
                4) 2-year
                5) Black-white/HBCUs
    Final Exam - In Normal Classroom