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New methods for comparing literacy across populations: insights from the measurement of poverty

Author

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  • Kevin Denny

    (Institute for Fiscal Studies and University College Dublin)

Abstract
This paper exploits an unusual policy reform that had the effect of reducing the direct cost of schooling in Ireland in the late 1960s. This gave rise to an increased level of schooling but with effects that vary substantially across family background. This interaction of educational reform and family background generates a set of instrumental variables that are used to estimate the return to schooling allowing for the endogeneity of schooling. Using a standard Mincer type model we find a large and well-determined rate of return of around 12% which are substantially higher than the OLS estimates of around 7%.

Suggested Citation

  • Kevin Denny, 2000. "New methods for comparing literacy across populations: insights from the measurement of poverty," IFS Working Papers W00/07, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:00/07
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    File URL: http://www.ifs.org.uk/wps/wp0007.pdf
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    References listed on IDEAS

    as
    1. Tim Callan, 1991. "Male-Female Wage Differentials in Ireland," Papers WP028, Economic and Social Research Institute (ESRI).
    2. Kling, Jeffrey R, 2001. "Interpreting Instrumental Variables Estimates of the Returns to Schooling," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(3), pages 358-364, July.
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    5. Colm Harmon; & Ian Walker, 1995. "Estimates of Economic Return to Schooling in the UK," Economics Department Working Paper Series n540195, Department of Economics, National University of Ireland - Maynooth.
    6. Tussing, A. Dale, 1978. "Irish Educational Expenditures - Past, Present, and Future," Research Series, Economic and Social Research Institute (ESRI), number GRS92.
    7. Callan, Tim & Harmon, Colm, 1999. "The economic return to schooling in Ireland," Labour Economics, Elsevier, vol. 6(4), pages 543-550, November.
    8. David Card, 1993. "Using Geographic Variation in College Proximity to Estimate the Return to Schooling," Working Papers 696, Princeton University, Department of Economics, Industrial Relations Section..
    9. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119, Decembrie.
    10. Kevin Denny & Harmon, Harmon & Sandra Redmond, 2000. "Functional literacy, educational attainment and earnings - evidence from the international adult literacy survey," IFS Working Papers W00/09, Institute for Fiscal Studies.
    11. Henry S. Farber & Jeffrey R. Kling & Alan Krueger, 1999. "Interpreting Instrumental Variables Estimates of the Returns to Schooling," Working Papers 794, Princeton University, Department of Economics, Industrial Relations Section..
    12. Orley Ashenfelter & Colm Harmon & Hessel Oosterbeek, 1999. "A Review of Estimates of the Schooling/Earnings Relationship, with Tests for Publication Bias," Working Papers 804, Princeton University, Department of Economics, Industrial Relations Section..
    13. Ashenfelter, Orley & Harmon, Colm & Oosterbeek, Hessel, 1999. "A review of estimates of the schooling/earnings relationship, with tests for publication bias," Labour Economics, Elsevier, vol. 6(4), pages 453-470, November.
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    15. Costas Meghir & Mårten Palme, 1999. "Assessing the effect of schooling on earnings using a social experiment," IFS Working Papers W99/10, Institute for Fiscal Studies.
    16. Uusitalo, R. & Conneely, K., 1998. "Estimating Heterogeneous Treatment Effects in the Becker Schooling Model," University of Helsinki, Department of Economics 435, Department of Economics.
    17. Basu, Kaushik & Foster, James E, 1998. "On Measuring Literacy," Economic Journal, Royal Economic Society, vol. 108(451), pages 1733-1749, November.
    18. Denny, K.J. & Harmon, C.P. & Redmond, S., 2000. "Cognitive Skills, Educational Attainment and Earnings -Evidence from the International Adult Literacy Survey," Papers 00/04, College Dublin, Department of Political Economy-.
    19. Ian Preston, 1995. "Sampling Distributions of Relative Poverty Statistics," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 44(1), pages 91-99, March.
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    21. Callan, Tim & Wren, Anne, 1994. "Male-Female Wage Differentials: Analysis and Policy Issues," Research Series, Economic and Social Research Institute (ESRI), number GRS163.
    22. Kevin Denny & Colm Harmon & Dorren McMahon & Sandra Redmond, 1999. "Literacy and Education in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 30(3), pages 215-226.
    23. Lang, Kevin, 1993. "Ability Bias, Discount Rate Bias and the Return to Education," MPRA Paper 24651, University Library of Munich, Germany.
    24. Joshua D. Angrist & Alan B. Keueger, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 979-1014.
    25. Harmon, Harmon & Ian Walker, 1995. "Estimates of the economic return to schooling for the UK," IFS Working Papers W95/12, Institute for Fiscal Studies.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Giorgina Brown & John Micklewright & Sylke V. Schnepf & Robert Waldmann, 2007. "International surveys of educational achievement: how robust are the findings?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 170(3), pages 623-646, July.
    2. Tommaso Agasisti & Sergio Longobardi & Vincenzo Prete & Felice Russo, 2018. "Multidimensional poverty measures for analysing educational poverty in European countries," Working papers 73, Società Italiana di Economia Pubblica.
    3. Juan-Francisco Sánchez-García & María-del-Carmen Sánchez-Antón & Rosa Badillo-Amador & María-del-Carmen Marco-Gil & Juan-Vicente LLinares-Ciscar & Susana Álvarez-Díez, 2019. "A New Extension of Bourguignon and Chakravarty Index to Measure Educational Poverty and Its Application to the OECD Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 145(2), pages 479-501, September.
    4. Hati, Koushik Kumar, 2012. "Can Poverty be Educated Out?," MPRA Paper 57374, University Library of Munich, Germany.
    5. Rolf Aaberge & Andrea Brandolini, 2014. "Multidimensional poverty and inequality," Discussion Papers 792, Statistics Norway, Research Department.
    6. Agasisti, Tommaso & Longobardi, Sergio & Prete, Vincenzo & Russo, Felice, 2021. "The relevance of educational poverty in Europe: Determinants and remedies," Journal of Policy Modeling, Elsevier, vol. 43(3), pages 692-709.
    7. Brown, Giorgina & Micklewright, John & Schnepf, Sylke V. & Waldmann, Robert, 2005. "Cross-National Surveys of Learning Achievement: How Robust are the Findings?," IZA Discussion Papers 1652, Institute of Labor Economics (IZA).
    8. María-del-Carmen Sánchez-Antón & Rosa Badillo-Amador & María-del-Carmen Marco-Gil & Juan-Vicente LLinares-Ciscar & Susana Álvarez-Díez & Juan-Francisco Sánchez-García, 2022. "Analysis of the Educational Poverty in Spain by Subjects, Regions and Gender," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 162(2), pages 829-861, July.
    9. Azevedo,Joao Pedro Wagner De, 2020. "Learning Poverty : Measures and Simulations," Policy Research Working Paper Series 9446, The World Bank.
    10. Micklewright, John & Schnepf, Sylke V., 2006. "Inequality of Learning in Industrialised Countries," IZA Discussion Papers 2517, Institute of Labor Economics (IZA).
    11. James Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster–Greer–Thorbecke (FGT) poverty measures: 25 years later," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 491-524, December.
    12. James E. Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster-Greer-Thorbecke (FGT) Poverty Measures: Twenty-Five Years Later," Working Papers 2010-14, The George Washington University, Institute for International Economic Policy.

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    More about this item

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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