Economics of Education

PE/PhD: Lecture + tutorial | MSc | 4 hrs | 8/10 ECTS | Schwerdt | engl. | ILIAS | ZEuS

Times and Rooms

Wednesday, 17:00 - 18:30, G227a
Thursday, 10:00 – 11:30, G309

On the following Wednesdays, the course will be held in room G310 (CIP-Pool) :

• 13.11.19
• 20.11.19
• 04.12.19
• 11.12.19

Course Description

This course consists of three modules. In module A, students learn about economic issues related to education balancing theory with empirical results. In particular, the decision to invest in education and how this decision is affected by ability, family background, and other factors will be discussed. We go on to examine the returns to education for the individual as well as for the society at large. Finally, we investigate the process and the financing of educational production with respect to efficiency and equity in the education system.

Many questions in the economics of education that are addressed in module A can ultimately only be answered empirically. This, however, requires sometimes complex empirical methods to distinguish causation from accidental association in the data. Thus, module B provides an introduction on research methods for empirical identification from an applied perspective.

Finally, module C focuses primarily on articles from academic journals. Students are expected to actively participate in the discussion of assigned readings and will also be assigned to lead class discussions including short presentations of the assigned readings. As many of the readings are intended for an advanced audience and will be challenging at first, students will not be expected to understand all the mathematics or econometrics. Instead, the focus will be on grappling with the author’s key insights. To prepare students to conduct original research (including senior theses), this module includes also a small group project.

The goal of the course is that students learn about current topics in education economics, about education policy, about evaluation methods, and about (the reality of) how to do applied research. The course is also designed to prepare students to understand and/or conduct original research (including senior theses). The course will be particularly useful for students interested in educational administration, educational planning and policy, and those with interest in pursuing further studies in the economics of education. However, it is also suitable for students with a more general interest in public administration or who intend to become or to advise policy makers in the future.

Outline: Course Modules

Module A: Topics in the Economics of Education

•    A.1 Introduction

•    A.2 The Returns to Human Capital Investments
o    Human Capital Theory
o    Signaling in the Labor Market
o    Returns to Education and Skills
o    Education and Economic Growth

•    A.3 The Production and Financing of Education
o    Educational Production, Class-Size Effects, and Funding
o    Teachers and Teaching
o    Performance Incentives for Teachers and Students
o    Accountability and Central Exams
o    School Autonomy
o    School Choice and Competition
o    Families and Intergenerational Mobility
o    Peer Effects and Social Interaction
o    Educational Tracking
o    Early Childhood Education Programs
o    Adult Education and Training

Module B: Econometric Methods for Policy Evaluation

•    B.1 Causal Inference from Observational Data
o    Field Experiments
o    Instrumental Variables
o    Regression Discontinuity
o    Differences-in-Differences
o    Fixed Effects

•    B.2 Causal Inference in Action (a hands-on learning session with simulated data using STATA)

Module C: Reading Sessions and Student Presentations

There will be at least six reading sessions during the semester. Readings will be assigned at least a week in advance. The specific topics/readings covered in the course will partly be endogenous to the specific interests expressed by participants.

Syllabus and Course Material

You have access to the course material via ILIAS. A password will be provided in the first lecture.