Vincent Vandenberghe

Combining Market and Bureaucratic Control in Education: An answer to market and bureaucratic failure?

This article focuses on institutional arrangements in education across Western countries. It essentially deals with the recent trend towards extended school choice presumably aimed at creating a competitive environment for schools and teachers. For many years the functioning of educational systems, in particular the way schools were institutionally co-ordinated, was not perceived as fundamental to economic analysis. But more and more economists now believe that the institutional setting in which schools are embedded-their governance structure-is decisive regarding both efficiency and equity. In this respect, it is worth noting that most Western countries rely essentially on bureaucratic control to co-ordinate their educational sector. Yet some of them, such as Belgium, The Netherlands, England and Wales, New Zealand and Sweden incorporate market-oriented mechanisms at the heart of their institutional arrangements. The main focus of this article is to analyse the origins, as well as the economic relevance, of this-in some cases relatively recent-tendency to mix bureaucratic and market approaches to education.

What Does It Take to Achieve Equality of Opportunity in Education ? An Empirical Investigation Based on Brazilian Data

Roemer s’ 1998 seminal work on equality of opportunity has contributed to the emergence of a theory of justice that is modern, conceptually clear and easy to mobilize in policy design. In this paper, we apply Roemer’s theory to education policy. We first analyze the reallocations of educational expenditure required to equalize opportunities (taken to be test scores close to the end of compulsory education). Using Brazilian data, we find that implementing an equal-opportunity policy across pupils of different socio-economic background, by using per-pupil spending as the instrucment, and ensuring that nobody receives less that 1/3 of the current national average, requires multiplying by 8.6 the current level of spending on the lowest achieving pupils. This result is driven by the extremely low elasticity of scores to per-pupil spending. As such, it implies large reallocations that are probably politically unacceptable. By exploiting our knowledge of the education production function, we then identify ways of reducing financial reallocations needed to achieve equality of opportunity. We show that the simultaneous redistribution of monetary and non-moneary inputs, like peer group quality (i.e. desegregation) and school effectiveness (i.e. equalizing access to the best-run schools), considerably reduces - by almost 50% - the magnitude of financial redistribution needed. Implementing an EOp policy would not come at any particular cost (or benefit) in terms of efficiency

Firm‐level Evidence on Gender Wage Discrimination in the Belgian Private Economy

In this paper we explore a matched employer-employee data set to investigate the presence of gender wage discrimination in the Belgian private economy labour market. Contrary to many existing papers, we analyse gender wage discrimination using an independent productivity measure. Using firm-level data, we are able to compare direct estimates of a gender productivity differential with those of a gender wage differential. We take advantage of the panel structure to identify gender-related differences from within-firm variation. Moreover, inspired by recent developments in the production function estimation literature, we address the problem of endogeneity of the gender mix using a structural production function estimator (Olley & Pakes, 1996; Levinsohn & Petrin, 2003) alongside IV-GMM methods where lagged value of labour inputs are used as instruments. Our results suggest that there is no gender wage discrimination inside private firms located in Belgium, on the contrary.

Leaving Teaching in the French-Speaking Community of Belgium: A Duration Analysis

This paper aims toward a better understanding of the factors influencing the decision of young graduates who entered teaching to stay in that profession. The field of research covers secondary education teachers in the French-speaking community of Belgium. The data analyzed comes from an administrative database containing historical records of 50 000 individuals who started teaching between 1973 and 1996. The analysis is carried out assuming a proportional hazard model and using the discrete-time method initiated by Prentice and Gloeckler ( Biometrics , 1978, 34, pp. 57-67). One of the main results is that the risk of exit is dramatically more important during the first periods of employment. The fact that this risk tends also to increase over time suggests that the dropout rate among young recruits is higher now than it was in the past. Location and labour market conditions seem to be of little impact.The risk of exit is the same in rural and urban areas and across provinces wherein unemployment rates vary dramatically. Finally, the significant deterioration of pay conditions (in relative terms) since the mid-1980s has had no significant impact on the risk of exit. Of greater importance are supply-side (organizational) elements such as the level of centralization of recruitment decisions or the level of asymmetry between tenure and non-tenure personnel regarding job protection, access to full-time position, etc.

Assessing education's contribution to productivity using firm-level evidence

There is plenty of individual-level evidence, based on the estimation of Mincerian equations, showing that better-educated individuals earn more. This is usually interpreted as a proof that education raises labour productivity. Some macroeconomists, analysing cross-country time series, also support the idea that the continuous expansion of education has contributed positively to growth. Surprisingly, most economists with an interest in human capital have neglected the level of the firm to study the education-productivity-wage nexus. And the few published works considering firm-level evidence are lacking a proper strategy to cope with the endogeneity problem inherent to the estimation of production and wage functions. This paper taps into a rich, firm-level, Belgian panel database that contains information on productivity, labour cost and the workforce’s educational attainment. It aims at providing estimates of the causal effect of education on productivity and wage/labour costs. Therefore, it exclusively resorts to within firm changes to deal with time-invariant heterogeneity bias. What is more, it addresses the risk of simultaneity bias (endogeneity of firms’ education-mix choices in the short run) using the structural approach suggested by Ackerberg, Caves & Frazer (2006), alongside more traditional system-generalized method of moments (GMM) methods (Blundell & Bond, 1998) where lagged values of labour inputs are used as instruments. Results suggest that human capital, in particular larger shares of university-educated workers inside firms, translate into significantly higher firm-level labour productivity, and that labour costs are relatively well aligned on education-driven labour productivity differences. In other words, we find evidence that the Mincerian relationship between education and individual wages is driven by a strong positive link between education and firm-level productivity.

Evaluating the "Threat" Effects of Grade Repetition: Exploiting the 2001 Reform by the French-Speaking Community of Belgium.

Like active labour market programmes, grade repetition could generate two types of effects: better/worse outcomes due to programme participation (i.e. the fact that pupils repeat a particular grade). This is what the existing literature on grade repetition has focused on. Another potential outcome is the ‘threat’ effect of grade repetition. Pupils and/or their family could make significant efforts to avoid grade repetition and its important opportunity cost. Learning effort by pupils could be a function of the risk of grade repetition. This paper attempts to assess that relationship by exploiting a reform introduced in 2001 in the French-Speaking Community of Belgium, synonymous with a reinforced overall threat of grade repetition. The possibility to impose grade repetition sanctions and the end of grades 8–12 has always existed, but in year 2001, policy makers reinstated the possibility to repeat grade 7, putting an end to the regime of ‘social promotion’ applicable to that grade since 1995. We use data from two waves of the Programme for International Student Assessment study (corresponding to periods before and after the reform) to evaluate the medium-term effects of this reform. The first measure of performance we consider is the position in the curriculum (or grade) reached at the age of 15, and we show that it deteriorated after 2001. We also consider the reforms impact on test scores. Focusing on grade 10, we fail to verify the necessary condition for grade repetition threat to lead to higher test scores. The tentative conclusion is that an enhanced threat of grade retention after 2001 did not lead to better medium-term outcomes, even among the segments of the population the most at risk of grade repetition.

The Productivity Challenge: What to expect from better-quality labour and capital inputs?

ABSTRACT The aim of this article is to develop and implement an analytical framework assessing whether better-quality inputs, via a rise of TFP, could compensate an ageing-induced slowing of economic growth. Here ‘better-quality’ means more educated and older/more experienced workforces; and also better-quality capital proxied by its ICT content. Economic theory predicts that these trends should raise TFP. To assess these predictions, we use EU-KLEMS data, with information on the age/education mix of the workforce, as well as the importance on ICT in total capital, for 34 industries within 16 OECD countries, between 1970 and 2005. We generalize the Hellerstein–Neumark labour-quality index method to simultaneously capture workers’ age/experience or education contribution to TFP growth, alongside that of ICT. The conclusion of the article is that the quality of inputs matters for TFP. We find robust microeconometric evidence that better-educated and older/more experienced workers are more productive than their less-educated and younger/less-experienced peers. Also, ICT capital turns out to be more productive than other forms of capital. And when used in a growth accounting exercise covering the 1995–2005 period, these estimates suggest that up to 40% of the recorded TFP growth could be ascribed to the rising quality of inputs.

Long Working Hours Make Us Less Productive but Also Less Costly

This paper develops and assesses empirically a simple model of firms’ optimal decision regarding working hours, where productivity varies with hours and where the firm faces quasi‐fixed labour costs. Using Belgian firm‐level data on production, labour costs, workers, and hours, and focusing on the estimation of elasticities along the isoquant and the isocost, we find evidence of not only declining productivity of hours but also of quasi‐fixed labour costs in the range of 20 per cent of total labour costs. The tentative conclusion is that firms facing such costs are enticed to raise working hours, even if this results in lower productivity.

Alternatives to polynomial trend-corrected differences-in-differences models

ABSTRACT A common problem with differences-in-differences (DD) estimates is the failure of the parallel-trend assumption. To cope with this, most authors include polynomial (linear, quadratic…) trends among the regressors, and estimate the treatment effect as a once-in-a-time trend shift. In practice, that strategy does not work very well, because inter alia the estimation of the trend uses post-treatment data. An extreme case is when sample covers only one period before treatment and many after. Then the trend’s estimate relies almost completely on post-treatment developments, and absorbs most of the treatment effect. What is needed is a method that i) uses pretreatment observations to capture linear or nonlinear trend differences, and ii) extrapolates these to compute the treatment effect. This article shows how this can be achieved using a fully flexible version of the canonical DD equation. It also contains an illustration using data on a 1994–2000 EU programme that was implemented in the Belgian province of Hainaut.

Raising and mobilising skills to boost productivity and inclusiveness in Belgium

A highly educated and skilled workforce has been an important driver of productivity performance and prosperity in Belgium. This paper examines skills policies that could help improve productivity and inclusiveness. An increased focus on lifelong learning, improved and more flexible working conditions for older workers, and a more efficient allocation of students and skills would benefit productivity growth. Improving inclusiveness requires increasing access and participation in tertiary education, especially for students with disadvantaged backgrounds. Digitalisation holds the promise of large gains in labour productivity, but is disrupting the nature of employment relationships. It calls for measures that encourage information and communication technology (ICT) upskilling and for adapting tax and benefit systems to the rise of on-demand jobs linked to the use of e-platforms.