So If Returns Are Not The Issue (b=0.1), Perceived Returns And Elite Bias Must Be???

Question 1

Elite bias: what do parents see education as?

Answer 1

Parents see education mainly as a way to secure a government/formal jobs

Question 2

Parents view on primary and secondary education

Answer 2

Little gains from primary, large from secondary!

(In Morocco,perceived b=5% primary, 15% secondary)

Of course this is wrong as we have seen that primary school b is around 10% in Angrist & Krueger (instrumental variables method in cut off dates for education) and Duflo (DiD in school construction Indonesia)

Question 3

Even if parents understand the true return to education, where do they still come short at?

Answer 3

They overestimate the dispersion (riskiness) of returns to education.

Like think its a low probability of securing a higher return

Question 4

Pick a winner

Answer 4

Pick child with best chance of making it to secondary/tertiary education (devote resources)

Question 5

What comprises this mentality? (3)

Answer 5

Social determinism (talent determined by caste)

Self fulfilling prophecy - Lack of teacher acccountability (child’s fault, not teacher)

Elite bias among children themselves (parents may signal to them that they aren’t cut out for education)

Question 6

Self-fulfilling prophecy - part of elite bias among children

Answer 6

If they can’t understand something, they may blame themselves rather than the teacher explaining it badly

Question 7

Stereotype threat - another part of elite bias from children themselves

Refer to Indian case

Answer 7

Found that when students were reminded of their caste (by asking full name) , low caste do significantly worse (may feel inferior and thrown off)

Question 8

Elite bias in teachers (2 ways)

Answer 8

Teachers are judged on how many students they send to the best secondary schools. So only about top students (rest are lost causes)

Also old fashioned sociological determinism (next case)

Question 9

Hanna and Linden - example of old fashioned socialogical determinism

Answer 9

Exams were graded included students’ caste.

Found lower caste students were graded lower despite same exam quality! Thus shows they care more about their

Question 10

What shape do parents think real returns to education are

Answer 10

Convex (low at primary, high for secondary)

Despite returns actually being linear around 9/10%!!

Question 11

So what are investments in children’s education seen to be?

Answer 11

Investments are an all or nothing, so pick a winner!

Invest if md-r/ø >= S
Don’t (S*=0) if … md-r/ø <=s

Question 12

Barrera-Osirio cash scholarship lottery experiment

Answer 12

Lottery for cash scholarship to attend secondary school.

Families where 2 children entered and 1 won, the other was now less likely to attend school than if both lost. So as result of more income, resources concentrate on the winner further!!!

Question 13

So in reality, there should not be an educational poverty trap. But by believing the returns are convex, people behave as if in a poverty trap (picking a winner), and thus they create one!

Answer 13

Low education>low income>don’t believe in education, so don’t know about true returns.

Question 14

So perceived convex returns create a poverty trap: how can we change the perceived returns to education?

2 cases
Foster and Rosenzweig

Jensen

Answer 14

Foster - HYV seeds more profitable for EDUCATED farmers. So, enrolment increased in areas suitable for those seeds, and children of educated farmers.

Jensen - call centres informed parents that girls who can speak English can get salaried jobs. This increased enrolment (so could learn English)

Question 15

Nguyen

Answer 15

Informed parents of true returns - through a simple parent-teacher meeting.

School attendance increased by 3.5%