Higher Private Returns Research Articles

Adoption of water-saving technology in agriculture: The case of laser levelers

Abstract Water saving agricultural technologies like laser leveling are a potentially important but under-utilized lever to conserve groundwater in India. We report findings from a survey about laser leveler adoption among farmers in Punjab in India. Despite high private returns, many farmers have not invested in laser leveling when it was available. We investigate factors associated with (and impediments to) adoption, including financial constraints and social network influence.

Government R&D subsidies as a signal for private investors

Government subsidies for R&D are intended to promote projects with high returns to society but too little private returns to be beneficial for private investors. This may be caused by spillovers or a low appropriability rate. Apart from the direct funding of these projects, government grants may serve as a signal for good investments for private investors. We use a simple signaling model with different types of R&D projects to capture this phenomenon. The agency has a preference for basic research projects as they promise high expected social returns, while banks prefer applied research projects with high private returns. In a setup where the subsidy can only be used to distinguish between basic and applied research projects, government agency’s signal is not very helpful for banks. However, if the subsidy is accompanied by a quality signal, it can lead to increased or better selected private investments.

Estimates of Mincerian Returns to Schooling in Nigeria

In the face of declining rates of primary and secondary school enrolment and increasing post-secondary school enrolment rates, the Nigerian government introduced the free universal basic education programme in 1999. To understand better the economic forces underlying the recent trends in school enrolment rates and appraise the new education policy from the perspective of private efficiency returns, I estimate the private returns to schooling associated with levels of educational attainment for wage and self-employed workers using data from the General Household Survey. The estimates for both men and women are small at primary and secondary levels, 2–3% and 4%, respectively, but are substantial at post-secondary education level, 10–15%. Inter-generational returns to schooling decline for primary education but rise for post-secondary education. These schooling return estimates may account for the recent trends in school enrolments. Thus, increasing public investment to encourage increased attendance in basic education is not justifiable on grounds of private efficiency, unless investments to increase school quality have higher private returns. With high private returns to post-secondary schooling, students at this level should pay tuition to recoup more of the public costs of schooling, which may be redistributed to poor families through scholarships.

Vive La Revolution! Long Term Returns of 1968 to the Angry Students

The famous events of May 1968, starting with student riots, threw France into a state of turmoil. The period of 'revolution' coincided with the time in which important examinations are undertaken. As a result, normal examination procedures were abandoned and the pass-rate for various qualifications increased enormously in that one year. These events were particularly important for students at an early (and highly selective) phase of higher education. They are shown to have pursued further years of education because thresholds were lowered at critical stages (i.e., at entry to university and in the early years of university). These historic events provide a natural experiment to analyze the returns to years of higher education for the affected generation and to consider consequences for their children. Thus, we can contribute to the debate on two very controversial questions in the economics of education: What is the true causal relationship between educational attainment and its labor market value? Is there a causal relationship between the education of parents and that of their children? Much of the existing literature considers the effect of interventions altering an individual's years of compulsory schooling on the margin rather than an intervention which occurs at a later stage. Our results are based on the latter and show a higher return for an additional year of education than would be suggested by many of the former studies. This may reflect higher returns from an additional year of university education rather than an additional year of compulsory education. Furthermore, the treatment group considered here is on the margin of the higher education system. This study suggests that expanding the university system to accommodate such people can yield very high private returns. There is also evidence of a strong causal relationship between obtaining an additional year of higher education and the educational outcomes of children. Hence, our study suggests very positive effects of the '1968 events' for affected cohorts and is of contemporary relevance given the current debate in many countries about widening access to higher education.

Wage Returns to Schooling in Nigeria

Abstract: In the last two decades, primary and secondary school enrollment rates have declined in Nigeria while enrollment rates in post‐secondary school have increased. This paper estimates from the General Household Survey for Nigeria the private returns to schooling associated with levels of educational attainment for wage and self‐employed workers. The estimates for both men and women are small at primary and secondary levels, 2–4 percent, but are substantial at post‐secondary education level, 10–15 percent. These schooling return estimates may account for the recent trends in enrollments. Thus, increasing public investment to encourage increased attendance in basic education is not justifiable on grounds of private efficiency, unless investments to increase school quality have higher private returns. With high private returns to post‐secondary schooling, students at this level should pay tuition, to recoup more of the public costs of schooling, which may be redistributed to poor families through scholarships.

Student loans for higher education in Singapore: some observations

The higher education system of Singapore is seen as crucial for the economic prosperity of the country. It is highly elitist, with fierce competition for limited places, and high private returns. In 1989 the Government announced a policy of reducing subsidies for higher education, in order to reduce the financial burden on the tax-payer, increase expenditure on other levels of education and achieve a more equitable distribution of costs. Tuition fees were increased sharply and a new student loan scheme, the Tuition Loan Scheme (TLS), was introduced. There are in addition two other loan schemes in Singapore, the Student Loan Fund (SLF), and the Central Provident Fund (CPF) Approved Education Scheme, under which parents may borrow from their CPF savings in order to finance their children's higher education, but must repay the loan. This article examines the arguments for and against student loans in Singapore, and concludes that the conditions necessary for a successful loan scheme are already in place: full employment, high private returns to higher education, and an efficient banking system and financial infrastructure. In the light of those conditions student loans seem to be an efficient and equitable form of finance for higher education in Singapore.

Lifetime Migration in Colombia: Tests of the Expected Income Hypothesis

The economic model of migration is applied to the developing country of Colombia. To model the determinants of migration flows in Colombia from an economic perspective the expected income hypothesis is the starting point - a migrant who is a member of the labor force considers not only the income to be earned in a given area but the probability of obtaining employment in that area and the higher the income or the probability of employment in an area the more migration to that area other things being equal. Published data from the 1973 Population Census were used to test whether the rates of lifetime migration into Colombias 23 departments are associated with those areas labor market conditions. Male and female population movements were considered separately and together. For both sexes the results sustain the empirical validity of the economic model of migration in the Colombian context. The 5 specific hypotheses that were confirmed by the available statistical data are: 1) women in Colombia migrate at higher rates than men; 2) women are more responsive than men to economic opportunities associated with migration for sociological reasons; the economic incentives are greater for men; 3) high income areas have higher immigration rates than low income areas; 4) areas with fuller and more stable employment have higher rates of immigration than do other areas; and 5) areas where the employment composition is relatively favorable have higher immigration than areas with poorer job mixes. On the basis of confirmation of the economic model of migration and the expected income hypothesis in Colombia it is warranted to conclude that this is another instance of the Colombian people shifting their economic energies to activities with higher private returns.