Educational Endowments Research Articles

Do (Some) University Endowments Earn Alpha?

The authors analyzed the returns earned by U.S. educational endowments using style attribution models. For the average endowment, models with only public stock and bond benchmarks explain virtually all the time-series variation in returns, yield no alpha, and generate sensible factor loadings. Elite institutions perform better than public stock and bond benchmarks because of large allocations to alternative investments. The authors found no evidence that manager selection, market timing, and tactical asset allocation generate alpha.

Retrospectives: John Maynard Keynes, Investment Innovator

John Maynard Keynes made a major contribution to the development of professional investment management. Based on detailed archival research at King's College, Cambridge, we describe Keynes' investment philosophy, his investment performance, and the evolution of his investment approach as the manager of a large educational endowment. His portfolios were actively managed and unconventional. He was an investment innovator both in making a substantial allocation to the then new institutional asset class of common stocks as well as in championing value investing.

John Maynard Keynes, the Investment Innovator

John Maynard Keynes made a major contribution to the development of professional investment management. Based on detailed archival research at King’s College, Cambridge, we describe Keynes’ investment philosophy, his investment performance, and the evolution of his investment approach as the manager of a large educational endowment. His portfolios were actively managed and unconventional. He was an investment innovator both in making a substantial allocation to the then new institutional asset class of common stocks as well as in championing value investing.

Overeducation and Externalities in the Eu: The Combined Moderating Influence of Migration and Gender

Using a bivariate probit model to control for selective access to employment, with this paper I aim to see whether, as expected by theory, migration lowers the problem of overeducation and gender division raises it, paying particular attention to the role of the proximity, interactions, and externalities of the various regions in the EU. The results show that workers with low probability of employment run a high risk of overeducation when they find a job. However, the results do not show evidence that male immigrants run a lower risk of overeducation than others. Highly educated people are more likely to migrate within a country not only to achieve better career prospects and greater employment opportunities but also to reduce the propensity for overeducation. The economic development and educational endowment of the region where a worker lives can explain the risk of overeducation.

Perspective

The authors contend that increasing diversity in academic medicine, science, technology, engineering, and mathematics requires the adoption of a systematic approach to retain minority high school and college students as they navigate the scientific pipeline. Such an approach should focus on the interrelated and multilayered challenges that these students face. The authors fuse an alternative conceptualization of the scientific and technical human capital theoretical framework and the theory of social identity contingencies to offer a conceptual model for targeting the critical areas in which minority students may need additional support to continue toward careers in science. Their proposed asset bundles model is grounded in the central premise that making greater progress in recruiting and retaining minorities likely requires institutions to respond simultaneously to various social cues that signal devaluation of certain identities (e.g., gender, race, socioeconomic status). The authors define "asset bundles" as the specific sets of abilities and resources individuals develop that help them succeed in educational and professional tasks, including but not limited to science and research. The model consists of five asset bundles, each of which is supported in the research literature as a factor relevant to educational achievement and, the authors contend, may lead to improved and sustained diversity: educational endowments, science socialization, network development, family expectations, and material resources. Using this framework, they suggest possible ways of thinking about the task of achieving diversity as well as guideposts for next steps. Finally, they discuss the feasibility of implementing such an approach.

WAQF AND ITS CONTRIBUTION IN EDUCATION IN HISTORICAL PERSPECTIVE

In classical Islamic education endowments have a close relationship with waqf institutions. Waqf institutions were financial resources for the activities of Islamic education that Islamic education could evolve rapidly. The existence of the Islamic waqf institution was caused by the Islamic economic system, which assumes that the economy was closely linked to the Muslims faith. Beside that, a balance between the economy and the welfare of Muslime people so that economic activities represented of worship and waqf became a way to closer to Allah and the common good. Therefore, when the Islamic economic progress, Muslims did not hesitate to spend money for the sake of religion and the welfare of Muslims. Driven by the teachings of Islam that respects the function of education for the advancement of religion and state, they feel compelled to spend their wealth for the implementation of education, and ultimately developing advanced Islamic education.
 Because of loving knowledge, raises the need to develop education by establishing institutions to teach and develop the science. With spearheaded by the Islamic rulers who love science, such as Harun al-Rashid and al-Ma'mun, stand up educational institutions for scientific activities, such as translation activities established by Harun al-Rashid, who at the time of al-Ma ' But the operation is perfect that resulted in the establishment Bait al-Hikmah. In further developments, the need to establish educational institutions create ideas about the need for charitable organizations that will be a source of financial institutions.
 Endowments role in supporting the implementation of education. With endowments, Muslims get the ease of study. Because of endowments, Islamic education was not too demanding a lot of cost for students so that they are either poor or rich have the opportunity to learned equally. Therefore, students and teachers were encouraged to perform a scientific journey.

The human capital characteristics and household living standards of returning international migrants in Eastern and Southern Africa.

Africa's experience with return migration is not new. However, few empirical studies have examined the social and economic characteristics of returning migrants within the continent. In this study, the human capital endowments and household living standards of returning migrants in Uganda and South Africa are examined using recently available data. The study compares returnees in both countries with immigrants as well as the native-born population with no international migration experience. It also investigates how factors such as previous country of residence, year of arrival, and other demographic factors predict levels of education and living standards among returning migrants. In Uganda, the results show that recently arrived returning migrants had better educational endowments than both immigrants and non-migrants. Migrants who returned to Uganda following the fall of Idi Amin's regime had the lowest educational levels and lowest living standards compared to other returnees. Furthermore, the results indicate that previous residence in countries in the West was associated with four additional years of schooling while returning migrants arriving from other African countries had the lowest levels of schooling among returning migrants. In South Africa, the study finds that returnees arriving almost immediately following the end of Apartheid had the highest levels of education compared to either immigrants or non-migrants. Returnees on average also had the highest household living standards in South Africa. Among South African immigrants, the results indicate that those arriving towards the end of the century had lower educational endowments compared to immigrants who arrived in the country two to four years after the end of Apartheid.

A new perspective on local political entrepreneurship: Evidence from Portugal

Despite the important existing contributions on public and political entrepreneurship, research on these topics is still scarce, particularly at the empirical level. Studies on political entrepreneurship have usually focused on the biography of entrepreneurial leaders and the analysis of case studies. Thus, a parameterisation of the variables and relationships that permit quantitative empirical research is in demand. The present study adds to the empirical literature on public and political entrepreneurship by proposing to examine and intersect several dimensions of political entrepreneurship at the local level: funds, activities, infrastructure, and global. Based on responses gathered from 108 Portuguese municipalities, we found that both individual – gender, previous occupational status, age, and managerial competencies of the mayor – and contextual conditions – accessibilities, educational endowments, and business structure of the municipalities, namely the share of medium and large firms – are key determinants of local political entrepreneurship.

Welfare Regimes and the Incentives to Work and Get Educated

This paper examines whether differences in welfare regimes shape the incentives to work and get educated. Using microeconomic data for more than 100 000 European individuals, we show that welfare regimes make a difference for wages and education. First, people-based and household-based effects (internal returns to education, and household wage and education externalities) generate socioeconomic incentives for people to get an education and work which are stronger in countries with the weakest welfare systems, that is, those with what is known as ‘residual’ welfare regimes (Greece, Italy, Spain and Portugal). Second, place-based effects and, more specifically, differences in regional wage per capita and educational endowment and in regional interpersonal income and educational inequality, also influence wages and education in different ways across welfare regimes. Place-based effects have the greatest impact in the Nordic social-democratic welfare systems. The results are robust to the inclusion of a large number of people-based and place-based controls.

Individual Earnings and Educational Externalities in the European Union

Rodríguez-Pose A. and Tselios V. Individual earnings and educational externalities in the European Union, Regional Studies. This paper examines whether differences in educational externalities affect individual earnings across regions in the European Union. Using microeconomic data from the European Community Household Panel, it resorts to spatial economic analysis in order to determine to what extent differences in individual earnings are the result of (1) the educational attainment of the individual, (2) the educational attainment of the other members of the household in which he/she lives, (3) the educational endowment of the region where the individual lives, or (4) the educational endowment of the neighbouring regions. The results highlight that, in addition to the expected positive returns of personal educational attainment, place-based regional and supra-regional educational externalities generate significant pecuniary benefits for workers. These findings are robust to the inclusion of different individual, household, and regional control variables. Rodríguez-Pose A. et Tselios V. Les gains individuels et les effets externes de l'éducation dans l'Union européenne, Regional Studies. Cet article cherche à examiner si, oui ou non, les différents effets externes de l'éducation influent sur les gains individuels à travers les régions de l'Union européenne. Employant des données microéconomiques provenant du European Community Household Panel (échantillon permanent des foyers de l'Union européenne), on a recours à une analyse économique spatiale afin de déterminer jusqu'à quel point les écarts des revenus individuels s'expliquent par (1) la réussite scolaire de l'individu, (2) par la réussite scolaire des autres membres du foyer, (3) par la dotation en équipement scolaire de la région où habite l'individu, ou bien (4) par la dotation en équipement scolaire des régions voisines. En plus des rendements positifs prévus de la réussite scolaire de l'individu, les résultats soulignent les avantages pécuniaires non-négligeables pour les travailleurs des effets externes régionaux et suprarégionaux de l'éducation qui sont basés sur l'endroit. Ces résultats s'avèrent robustes quand on inclut des variables de contrôle différentes pour l'individu, le foyer et la région. Gains individuels Réussite scolaire Effets externes Foyers Régions Europe Rodríguez-Pose A. und Tselios V. Individuelles Einkommen und Bildungsexternalitäten in der Europäischen Union, Regional Studies. In diesem Beitrag wird untersucht, ob sich die Unterschiede bei den Bildungsexternalitäten auf das individuelle Einkommen in verschiedenen Regionen der Europäischen Union auswirken. Ausgehend von mikroökonomischen Daten des Haushaltspanels der Europäischen Gemeinschaft wird eine räumliche Wirtschaftsanalyse durchgeführt, um festzustellen, in welchem Umfang die Unterschiede bei den individuellen Einkommen auf (1) den Bildungsgrad der Person, (2) den Bildungsgrad der anderen Mitglieder des Haushalts dieser Person, (3) den Bildungsstand der Region, in der die Person lebt, oder (4) den Bildungsstand der angrenzenden Regionen zurückzuführen sind. Aus den Ergebnissen geht hervor, dass zusätzlich zu den erwarteten positiven Ergebnissen des persönlichen Bildungsgrades auch die ortsgebundenen regionalen und supraregionalen Bildungsexternalitäten für die Arbeitnehmer mit signifikanten finanziellen Vorteilen verbunden sind. Diese Ergebnisse bleiben auch bei Berücksichtigung verschiedener individueller, Haushalts- und regionaler Kontrollvariablen robust. Individuelles Einkommen Bildungsgrad Externalitäten Haushalte Regionen Europa Rodríguez-Pose A. y Tselios V. Ingresos individuales y externalidades educativas en la Unión Europea, Regional Studies. En este artículo se examina si las diferencias de las externalidades educativas entre las regiones de la UE influyen sobre los ingresos económicos de los individuos. Mediante un análisis económico de carácter espacial y utilizando datos microeconómicos provenientes de la Encuesta Europea de Familias se intenta determinar si las diferencias de los ingresos entre individuos en distintas regiones de la UE son el resultado de (1) el nivel educativo de cada individuo, (2) el nivel educativo de los demás miembros de la unidad familiar, (3) el nivel educativo de la región en la que se vive o (4) el nivel educativo de las áreas vecinas. Los resultados demuestran que, además de los rendimientos positivos ligados al nivel personal de formación, las externalidades geográficas de carácter regional y supra-regional generan importantes beneficios pecuniarios para los trabajadores. Estos resultados son sólidos para la inclusión de distintas variables de control de tipo individual, familiar y regional. Ingresos individuales Nivel de formación Externalidades Unidades familiares Regiones Europa

Do (Some) University Endowments Earn Alpha?

We analyze the returns earned by US educational endowments using style attribution models. For the average endowment, models with only public stock and bond benchmarks explain virtually all of the time-series variation in returns, yield no alpha, and generate sensible factor loadings. Elite institutions perform well relative to public stock and bond benchmarks because of large allocations to alternative investments. We find no evidence that manager selection, market timing, and tactical asset allocation generate alpha.

Public education in developing countries: Cost-effectiveness of education policies and endowments growth

The article analyses the general equilibrium effects of education as a user and producer of resources considering some features of the sector typical in developing countries, such as the presence of inefficiencies, in a model that nevertheless remains close to the Heckscher–Ohlin paradigm. Short- and long-term effects of education are considered and it is shown that the overall effects are linked to the efficiency with which endowments are produced. The analysis has implications for policymakers in developing countries with failing educational systems, as it suggests a relation between cost-effectiveness of policies and growth and not between enrolments and growth or between public expenditure in education and growth as it is usually tested in growth regressions.

Educational Endowments in Crises

1. William N. Goetzmann 1. is the Edwin J. Beinecke Professor of Finance and Management Studies at Yale School of Management in New Haven, CT. (william.goetzmann{at}yale.edu) 2. John Griswold 1. is the executive director of the Commonfund Institute in Wilton, CT. (jgriswol{at}cfund.org) 3. Yung-Fang (Ayung) Tseng 1. is a graduate student and research assistant at the Yale School of Management in New Haven, CT. (ayung_tseng{at}aya.yale.edu) <!-- --> 1. To order reprints of this article, please contact Dewey Palmieri at dpalmieri{at}iijournals.com or 212-224-3675. Whether measured by institutional failures, asset price declines, or shocks to the real economy, the financial crisis of 2008 is widely viewed as the worst since the Great Depression. The turmoil has been particularly acute for institutions that rely heavily on financial assets to fund operations. Consequently, some universities with large allocations to illiquid alternative asset classes have disclosed liquidity problems as a reason for basic changes in strategy and services. Goetzmann, Griswold, and Tseng explore whether these effects on institutions will be long lasting, particularly if the global economic recovery is slow to materialize. In this article, the authors review data from previous studies on educational endowments extending back into the 1920s, examining the allocation policies from the early 20th century, and exploring the policies’ effects on asset values and endowment spending. Although similarities are noted between the endowment environments then and now, differences exist as well. In the late 1970s and early 1980s, the modern endowment model, which employs broad diversification, invests for total return with a strong equity bias, maintains a low cash allocation, and spends a percentage of total return, began to be widely adopted. The modern endowment model has recently undergone a paradigm shift away from publicly traded securities toward alternative assets, and a similar change in thinking—the decision to embrace “new era” equity investing to achieve diversification—occurred in the period of the authors’ study. The authors consider whether the adoption of a new philosophy of investing benefited endowments during the Great Depression and if the adoption of a new philosophy of investing would provide a useful decision framework for managers today. TOPICS: [Financial crises and financial market history][1], [analysis of individual factors/risk premia][2], [factor-based models][3] [1]: https://www.pm-research.com/topic/financial-crises-and-financial-market-history [2]: https://www.pm-research.com/topic/analysis-individual-factorsrisk-premia [3]: https://www.pm-research.com/topic/factor-based-models

Educational Endowments and the Financial Crisis: Social Costs and Systemic Risks in the Shadow Banking System (A Study of Six New England Schools)

Provides comparative analysis of six New England college endowments (Boston College, Boston University, Brandeis, Dartmouth, Harvard, and MIT) during the financial crisis of 2007-2009. The paper identifies deep-seated problems with the influential, radically diversified Endowment Model of Investing, pioneered by wealthy schools such as Harvard and Yale. It argues that endowment performance must be measured beyond portfolio-level risks and returns, and to that end it explores endowments' contributions to systemic risks in the shadow banking system and estimates social costs (job losses, project delays) of endowment declines on local communities and regional economies in the Boston metropolitan region and the Upper Valley of New Hampshire and eastern Vermont, using RIMS II. We analyze freshly aggregated data panels on endowment growth, asset allocation, illiquidity (making novel use of Fair Value Hierarchies), borrowings and debt ratios, board composition and conflicts of interest, workforce and compensation trends, payments in lieu of taxes (PILOTs) on exempt property. The paper includes detailed appendices of identified investment holdings at each school, within limits of transparency (2008/2009).

An Argument for the Repeal of Tax Preferences for Educational Endowments

This essay examines the case for granting tax preferences to private university endowments. It looks first at the theoretical arguments that can be made to justify using tax preferences to enlist the help of private individuals in the pursuit of public goals, and finds that such arguments do not apply in the case of tax preferences for endowments. It then looks at the actual performance of private university endowments, asking whether their existence or their rapid growth has led to the provision of more higher education, or cheaper higher education, or better higher education. The unfortunate answer is “No.” In light of the foregoing, the essay recommends the repeal of tax preferences for private university endowments

Changes in human capital and earnings inequality: Recent evidence from Brazil1

This paper estimates changes in the rates of return to human capital across the earnings distribution using data from over a 10-year period for Brazil. It uses these estimates to simulate the separate impacts of changes in returns to skills and changes in the supply of skills on earnings inequality. Evidence points strongly to growing inequality in rates of return to education in Brazil. This finding suggests that recent macroeconomic and trade reforms have been of most benefit to the skilled rather than the unskilled. Supporting evidence points to an improved competitiveness in the labour market, with workers increasingly rewarded for productivity. However, although increases in returns to education are more pronounced at the top of the earnings distribution, this did not in practice led to increased inequality. This is because levels of education and other labour market-rewarded endowments have increased and offset the rate of return effect. Appropriate education policy is therefore an essential partner for macroeconomic and trade reform if a developing economy is to avoid worsening income inequality.

Earnings Inequality in India: Has the Rise of Caste and Religion Based Politics in India Had an Impact?

Since 1989, there has been a sharp increase in the role of caste and religion in determining political fortunes at both state and federal levels in India. As a consequence, significant intercaste and inter-religion differences in earnings have the potential to stall the process of economic reforms. Yet, the patterns and determinants of such differences remain unexplored. We address this lacuna in the literature, and explore the determinants of the differences in inter-caste and inter-religion earnings in India during the 1987-99 period, using the 43 rd and 55 th rounds of National Sample Survey (NSS). Our results suggest that (a) earnings differences between “upper” castes and SC/ST have declined between 1987 and 1999, (b) over the same period, earnings differences between Muslims and non-Muslims have increased, to the detriment of the former, and (c) inter-caste and inter-religion differences in earnings can be explained largely by corresponding differences in educational endowment and returns on age (and, hence, experience). However, differences in returns on education do not explain inter-caste and inter-religion earnings differences to a great extent.

Parental Preference, Heterogeneity, and Human Capital Inequality

Abstract In this article, I provide an empirical account of the human capital investment behavior of parents in the face of endowment differences among siblings. The data set used contains a three‐wave panel of 4,030 individuals. The article presents a rare case in which endowments are measured explicitly. Health endowments are estimated from dynamic health production functions, while educational endowments are obtained from test scores. The simple score of the standard Raven’s Colored Progressive Matrix (CPM) test is used to measure educational endowments. I use estimation procedures that combine an instrumental variables method with panel data estimators to control for endogeneity and heterogeneity. The results suggest that parents compensate for initial differences in health but reinforce initial educational differences among siblings. Hence, an educational subsidy aimed at reducing inequality may end up reinforcing the inequality that might exist in the absence of such subsidy. When parents invest mor...

Review: The Transformation of Edinburgh

There are books, and there are books. We live in an age where more are published per day than at any point in human history and, perhaps as a consequence, most have a very limited shelf-life, and in all honesty, deservedly so. This is quite a different story. It has been a long time in the making, and the wait has been well worth it. Richard Rodger began his research on Edinburgh's property system as a young PhD student in the 1970s, and has been carefully assembling his account ever since. The book focuses on the legal and institutional structures within which urban development occurred in the city in the nineteenth century and is, ostensibly, about the complex networks of trusts, educational endowments and charities, as well as builders, developers and related professionals who shaped Edinburgh. To be sure, Scotland's capital city was, and is, peculiar. Its professional employment was three times that of Glasgow, and that both reflected, and was reflected in, its social and economic structures.

Reducing Schooling Inequality in Brazil: Demographic Opportunities and Inter-cohort Differentials

The objective of this paper is to explore the interplay between schooling and demographics in Brazil. We would like to provide a preliminary answer to the question of how long will improvements in schooling of younger cohorts take o change the distribution of educational endowments of the total labor force. This answer depends on two factors. The first is the demographic composition of the working age population - the weight each cohort has in the 16 to 70 year old population. The second is the distribution of schooling within each cohort- its average educational level and the inequality within each cohort. These two factors - demography and education by cohort - define the average educational level and the distribution of education for the working age population in any given year. This paper takes a standard demographic projection and makes various hypotheses about the evolution of education - both the mean and inequality. According to these hypotheses, we will calculate how long improvements in the schooling of successive cohorts take to translate into significant improvements in the schooling of the working age population. Our results are somewhat pessimistic. We calculate that even very strong departures from the observed trend will take many years or decades to translate into significantly different educational endowments for the working age population. In other words, we show that demographic inertia is a strong factor preventing changes in educational endowments in periods shorter than a few decades.