How do we have to organize our educational systems against a rapidly changing labor market environment? Educational decisions of parents and students are taken against changing skill requirements, and new labor market policies have potentially unintended consequences for education decisions. School choice, teachers’ efficiency, and school financing were some of the topics discussed at the 3rd IZA Workshop on the Economics of Education, which brought together 21 international scholars to present their research at IZA in Bonn.
A keynote speech by Susan Dynarski highlighted the current knowledge on how inequality and educational outcomes are interrelated. While much has changed for the better over the past decades, socioeconomic background remains an important determinant of student success – at every stage of education. Informational and financial constraints are only slowly being overcome, although recent research points to promising solutions and interventions.
For example, Andres Barrios Fernandez presented his work in which he demonstrates how older direct neighbors and siblings receiving student loans increase the probability of younger neighbors or siblings to go to university. The effect appears to work through reducing informational disadvantages about loan eligibility and the application process, and this highlights the scope for spillovers of supporting individuals in poor neighborhoods in their college application process.
Timothy N. Bond analyzed how teacher performance pay linking salaries to measurable increases in student performance leads to better longer-term labor market success of those students being exposed to such programs. Cohorts with more students taught by teachers who were paid by performance are more likely to graduate from high school and earn higher wages as adults. The effect appears to be especially driven by primary schools with a higher fraction of disadvantaged students. This provides a direct link of teacher performance pay to inequality.
View the full conference program.