Education and human capital

Education shows great resilience to shocks—labor demand for highly skilled workers has remained high in all kinds of economic conditions. Public policy for education and human capital includes increasing the economic and social returns on education, fostering greater educational attainment, encouraging social and economic mobility, and providing vocational education, training, and lifelong learning.

  • How to attract international students? Updated

    Studying abroad benefits the students, the host country, and those remaining at home

    Arnaud Chevalier, May 2022
    In knowledge-based economies, attracting and retaining international students can help expand the skilled workforce. Empirical evidence suggests that open migration policies and labor markets, whereby students can remain in the host country post-study, as well as good quality higher education institutions are crucial for successfully attracting international students. Student migration can positively affect economic growth in both sending and receiving countries, even though migrants themselves reap most of the gains, mainly through higher earnings.
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  • Is there an optimal school starting age? Updated

    It depends: older children perform better on standardized tests, but evidence of older school starting ages on long-term outcomes is mixed

    There is a widely held belief that older students, by virtue of being more mature and readier to learn at school entry, may have better academic, employment, and earnings outcomes compared to their younger counterparts. There are understated, albeit important, costs to starting school later, however. Compulsory school-attendance laws may allow these same older pupils to drop out of high school earlier, which could adversely impact their employment; entering the workforce later also has implications for lifetime earnings and remittances to governments. Overall, research suggests that school-age entry policies can improve student achievement in the short term, but the long-term impacts are currently not well-understood.
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  • The quantity–quality fertility–education trade-off Updated

    Policies to reduce fertility in developing countries generally boost education levels, but only slightly

    Li LiHaoming Liu, March 2022
    At the national level, it has long been observed that a country's average education level is negatively associated with its total fertility rate. At the household level, it has also been well documented that children's education is negatively associated with the number of children in the family. Do these observations imply a causal relationship between the number of children and the average education level (the quantity–quality trade-off)? A clear answer to this question will help both policymakers and researchers evaluate the total benefit of family planning policies, both policies to lower fertility and policies to boost it.
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  • Can cash transfers reduce child labor? Updated

    Cash transfers can reduce child labor if structured well and if they account for the reasons children work

    Furio C. Rosati, February 2022
    Cash transfers are a popular and successful means of tackling household vulnerability and promoting human capital investment. They can also reduce child labor, especially when it is a response to household vulnerability, but their efficacy is very variable. If not properly designed, cash transfers that promote children's education can increase their economic activities in order to pay the additional costs of schooling. The efficacy of cash transfers may also be reduced if the transfers enable investment in productive assets that boost the returns to child labor. The impact of cash transfers must thus be assessed as part of the whole incentive system faced by the household.
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  • The dynamics of training programs for the unemployed Updated

    Job search training and occupational skills training are both effective

    Aderonke Osikominu, December 2021
    Time plays an important role in both the design and interpretation of evaluation studies of training programs. While the start and duration of a training program are closely linked to the evolution of job opportunities, the impact of training programs in the short and longer term changes over time. Neglecting these “dynamics” could lead to an unduly negative assessment of the effects of certain training schemes. Therefore, a better understanding of the dynamic relationship between different types of training and their respective labor market outcomes is essential for a better design and interpretation of evaluation studies.
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  • Do rising returns to education justify “helicopter” parenting?

    Increased stakes in educational achievement explain why today’s anxious parents engage in intensive parenting styles

    Parents now engage in much more intensive parenting styles compared to a few decades ago. Today’s parents supervise their children more closely, spend more time interacting with them, help much more with homework, and place more emphasis on educational achievement. More intensive parenting has also led to more unequal parenting: highly educated parents with high incomes have increased their parenting investments the most, leading to a growing “parenting gap” in society. These trends can contribute to declining social mobility and further exacerbate rising inequality, which raises the question of how policymakers should respond.
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  • Early-life medical care and human capital accumulation Updated

    Medical care and public health interventions in early childhood may improve human capital accumulation as well as child health

    Ample empirical evidence links adverse conditions during early childhood (the period from conception to age five) to worse health outcomes and lower academic achievement in adulthood. Can early-life medical care and public health interventions ameliorate these effects? Recent research suggests that both types of interventions may benefit not only child health but also long-term educational outcomes. In some cases, the effects of interventions may spillover to other family members. These findings can be used to design policies that improve long-term outcomes and reduce economic inequality.
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  • Is training effective for older workers? Updated

    Training programs that meet the learning needs of older workers can improve their employability

    Matteo Picchio, July 2021
    The labor market position of older workers is cause for concern in many industrialized countries. Rapid population aging is challenging pension systems. The recent economic crisis has forced many older adults out of the workforce, into either pre-retirement or non-employment. Encouraging people to work longer and fostering the employability of older workers have become priorities for policymakers. Training specifically designed for older workers might help attain these goals, since it may refresh human capital and reduce the pay–productivity gap. Training older workers might also benefit employers and society as a whole.
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  • Income inequality and social origins Updated

    Promoting intergenerational mobility makes societies more egalitarian

    Lorenzo Cappellari, May 2021
    Income inequality has been on the rise in many countries. Is this bad? One way to decide is to look at the degree of change in incomes across generations (intergenerational mobility) and, more generally, at the extent to which income differences among individuals are traceable to their social origins. Inequalities that reflect factors largely out of an individual’s control—such as parents’ education, local schools, and communities—require attention in order to reduce income inequality. Evidence shows a negative association between income inequality and intergenerational mobility, and a positive relationship between mobility and economic performance.
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  • Immigrants in the classroom and effects on native children Updated

    Having immigrant children in the classroom may sometimes, but not always, harm educational outcomes of native children

    Peter Jensen, April 2021
    Many countries are experiencing increasing inflows of immigrant students. This raises concerns that having a large share of students for whom the host country language is not their first language may have detrimental effects on the educational outcomes of native children. However, the evidence is mixed, with some studies finding negative effects, and others finding no effects. Whether higher concentrations of immigrant students have an effect on native students differs across countries according to factors such as organization of the school system and the type of immigrants.
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