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Education as an asset

Education as an asset. Owning up (Chapter 4) Sandra and Wildcat Haskins, Ron. 2008. “Education and Economic Mobility” Isaacs, Julia B. 2008. “International Comparisons of Economic Mobility”

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Education as an asset

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  1. Education as an asset • Owning up (Chapter 4) Sandra and Wildcat • Haskins, Ron. 2008. “Education and Economic Mobility” • Isaacs, Julia B. 2008. “International Comparisons of Economic Mobility” • Parrish, Leslie. 2004. “Building Assets through Post-secondary Education: Policy Recommendations to Broaden Access to Higher Education for Low-Income Americans.” (Washington: New America Foundation) • Holzer, Harry J. and Demetra S. Nightingale. 2009. “Strong Students: Models for Student Success through Workforce Development and Community College Partnerships.” American Progress. • Miller, Cynthia, Mark van Dok, Betsy L. Tessler, and Alexandra Pennington. 2012. “Strategies to Help Low-Wage Workers Advance.” MDRC Report.

  2. How did you get your first job? • What skills, knowledge, or connections did you gain?

  3. Human Capital Model: • Human capital as an asset: knowledge, skills, experience useful for future “productivity” (usually in labor market) • Potential influences: available options, financial incentives and costs, information, social/cultural capital • Experience versus education returns • Earnings change over life span (age) Why? • Types of human capital: • General (useful in many jobs) • Firm specific, industry or geographically specific? • More formal information on human capital model: http://faculty.washington.edu/jacoby/BLS345/%20HCtutorial.html

  4. Job Search Models: • Job matching: returns to workers and firms greater if workers are better matched to firms and jobs • Workers look to find jobs and employers seek workers • In search models, job offers “arrive” to the worker with a probability distribution that depends on human capital; Time until employment depends on : • distribution of wage offers and random draws • “reservation wage” • “compensating differentials” • Some unemployment spells can lead to better job matches (higher productivity and wages)—Unemployment benefits may increase economic efficiency, but also could induce moral hazard • Unemployment insurance is experience rated (employers pay based on lay-offs. But rules of system may disadvantage low income workers • More formal information on job search model: http://en.wikipedia.org/wiki/Search_theory

  5. Evaluation of Public investments in education: • Public investments in education and training should be cost-effective and provide significant return on investment (public and private) • Assessing program effects and return on investment is difficult: • Time horizons are long and returns change over time • Returns may depend on target population • Programs may not be easy scalable or replicated. • Washington State Inst. For Public Policy provides model for assessing return on investment: http://www.wsipp.wa.gov/rptfiles/11-07-1201.pdf

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