Teachers' Pay and Pupil Performance
If you pay peanuts, do you get monkeys? If teachers were better paid and higher up the national income distribution, would there be an improvement in pupil performance? Peter Dolton and Oscar Marcenaro-Gutierrez examine the enormous variation in teachers' pay across OECD countries and its significance for educational outcomes.
Exploring the Relationship Between Household Income and High School Graduation Rates
To better understand the factors that contributed to the rise in high school graduation rates between 2008 and 2015, this study explored the relationship between average household income and average four-year graduation rates for public high schools in Georgia counties in 2015. Additional economic factors including teacher salary, spending per pupil, local education revenue, maintenance and operation (M&O) tax, poverty rate and Gini index as well as social factors, including unemployment, class size, educational attainment and teen pregnancy rate were studied. Four ordinary least squares (OLS) models were generated to understand the impact of change in household income on high school graduation rates at all income levels and at the income extremes. Analysis of the results shows that household income is not statistically significant throughout the models for our full data set. When looking solely, at the upper and lower​ ​income​ ​brackets,​ ​household​ ​income​ ​is​ ​significant​ ​at​ ​the​ ​5%​ ​level.
The Timing of Parental Income and Child Outcomes: The Role of Permanent and Transitory Shocks
How do shocks to parental income drive adolescent human capital, including years of schooling, high school dropout, university attendance, IQ and health? A structural model decomposes household shocks into permanent and transitory components, then the effect of shocks at age 1-16 is estimated for 600,000 Norwegian children. The effect of permanent shocks declines - and of transitory shocks is small and constant across child age, suggesting parents optimise similarly to consumption. However there is a lower effect of transitory shocks for liquidity constrained parents. An interpretation is that these parents use income shocks for essential consumption rather than investment.