DEPARTMENT OF ECONOMICS
ECONOMICS 383H5F – FALL 2011
ECONOMICS of EDUCATION
Course Description
This is a one-semester course in applied
microeconomic policy analysis.
Its general preoccupation is with the use of quantitative
method to answer interesting practical questions, though our specific focus
will be on a series of interesting issues in the field of the Economics of
Education. Topics include measuring the
effects of resources on academic achievement (especially reducing class
size/hiring more teachers); the performance effects of curriculum reform (in
Ontario); measuring the benefits of improvements in school quality; assessing
the incentive effects of bonus pay for teachers and schools; and school
vouchers and school choice.
The course should be suitable for third and fourth
year students interested in both applied microeconomics and (quantitative)
public policy analysis. It has three
main goals: first, to provide you with a clear understanding of a set of
policy-relevant topics in the Economics of Education field, helping to
familiarize you with the broader policy debate; second, to develop analytical
skills used in applied microeconomic analysis; and third, to develop skills
useful for the analysis and interpretation of data.
With the third goal in mind, the class begins with a
self-contained treatment of econometric analysis. Having covered the rudiments of econometrics
at the front end of the course, we will then be in a position to read and
understand some interesting applied work in the education field. That will be the payoff later on, once we have
covered some necessary rudiments.
Course
Organization
Lectures: Thursday 4:00pm - 6:00pm in
Instructor: Prof. Robert McMillan
Office: Room
K263, Kaneff Centre
Phone: 905 828-3911
Office Hours: Thursday 2:00pm – 3:15pm
Email: mcmillan@chass.utoronto.ca
Web Site: www.economics.utoronto.ca/mcmillan
(linking through to Undergraduate Economics of Education (ECO383H5) under
“Teaching”)
Please note: the course website will be used
extensively during the semester, to provide you with important course-related
information.
Course
Requirements
The course will include (in
order) one short in-class test, a midterm examination, two short writing
assignments, and a final examination.
The in-class test will take place in the first half
of class on October 6, 2011, and will focus on the basic ‘measurement’ material
(primarily curve fitting and inference) that we will have covered in the course
prior to that. It will be worth 10
percent of the overall grade.
The midterm will take place in class on October 28,
2011. It is worth 25 percent of the
overall grade, and will cover material discussed in class prior to that
date.
Please note that neither the in-class test nor the
midterm is optional. Students should
therefore plan to attend both of these exams on their scheduled dates. They should also understand that make-up tests
will only be offered at the instructor’s discretion: the default score for
missing the in-class test or the midterm is zero.
The writing assignments will involve answering a set
of questions on academic papers that we have covered in class. Each assignment is worth 5 percent of the
overall grade on the due date at the start of class. (Please note that there will be no exceptions
to this rule.)
Relevant to the written assignment, it is important
to emphasize that the writing for this course must be your own work. Plagiarism is an academic offence, and as a
safeguard, this course will be using “Turnitin” for each assignment. (See “Academic Misconduct” below.) Each
assignment should thus be submitted to Turnitin. (Students who find it difficult to write
grammatical English are strongly advised to seek help from the Academic Skills
Centre on campus.)
The final examination is worth 45 percent of the
overall grade, and will cover material drawn from the entire course. The final will take place during the exam
period at the end of the semester.
To encourage student involvement in class
discussions (over and above attending class) throughout the course, the
remaining 10 percent of the overall grade will be based on class participation.
A list of readings is given
in the Course Outline below.
Assigned readings are given
a star. You should read these before
coming to class, as they will form the basis of our class discussion. (The unstarred readings are for those of you
who wish to read some more advanced work on the relevant topic. Several of these papers may be a challenge to
read, but contain interesting ideas none-the-less.) For the final exam, you will be responsible
for all the material covered in lectures – the readings are intended to provide
background to these.
For econometric background,
Jeffrey M. Wooldridge’s book, Introductory Econometrics: A Modern Approach
(any edition) is superb. I would strongly
recommend that you to buy and learn from this outstanding textbook.
All the articles or book chapters will be
made available on the course website indicated below or placed on reserve at
the UTM Library.
Prerequisites
The
prerequisites for the course are:
ECO200Y5/206Y5,
ECO220Y5/227Y5/STA(250H1,257H5)/STA(257H5,261H5)/STA(257H5,248H5/258H5).
Prerequisites are strictly checked and enforced and
must be completed before taking a course.
By taking this course, you acknowledge that you will be removed from the
course at anytime if you do no meet all requirements set by the Department of
Economics. For further information the
2011-2012 Academic Calendar, available from the Registrar’s Office.
Students should note that copying, plagiarizing, or other forms of
academic misconduct will not be tolerated. Any student caught engaging
in such activities will be subject to academic discipline ranging from a
mark of zero on the assignment, test or examination to dismissal from the university
as outlined in the academic handbook. Any student abetting or otherwise
assisting in such misconduct will also be subject to academic penalties.
As a student it is your responsibility to ensure the integrity of your
work and to understand what constitutes an academic offence. If you have
any concerns that you may be crossing the line, always ask your instructor.
Your instructor can explain, for example, the nuances of plagiarism and
how to use secondary sources appropriately; he or she will also tell you
what kinds of aids -- calculators, dictionaries, etc. – are permitted in
a test or exam. Ignorance of the rules does not excuse cheating or
plagiarism. For more information regarding the Code of Behaviour on
Academic Matters please visit http://www.utm.utoronto.ca/regcal/WEBGEN121.html
“Students will be required to submit their course
essays to Turnitin.com for a review of textual similarity and detection
of possible plagiarism. In doing so, students will allow their essays to
be included as source documents in the Turnitin.com reference database, where
they will be used solely for the purpose of detecting plagiarism. The
terms that apply to the University's use of the Turnitin.com service are
described on the Turnitin.com web site”
The
following gives a brief list of the topics we will cover in the course. We may spend more than one week on a given
topic. New readings may supplement
readings given on the list below: please refer to the course website for any
changes.
1. Introduction
Course objectives, course requirements, and a brief
survey of topics.
2. Organizing
Framework: the Education Production Function
·Education Production: Empirics
Hanushek, Eric A. (1986),
“The Economics of Schooling: Production and Efficiency in Public Schools,” Journal
of Economic Literature, 49(3): 1141-1177.
Hanushek, Eric A. (1996),
“School Resources and Student Performance,” in
Todd,
·Education Production: some theory
Lazear, Edward P. (2001),
“Education Production,” Quarterly Journal of Economics, August, 116(3):
777-803.
3. Measurement: an Introduction to Econometric
Analysis
For the first part of the course, I will be basing the class discussion
on the treatment in Wooldridge’s outstanding text, though my discussion will be
much briefer. Please refer to the
chapters on the ‘The Simple Regression Model,’ ‘Multiple Regression Analysis:
Estimation’ and ‘Multiple Regression Analysis: Inference,’ if you would like a
thorough background.
·Curve fitting – intuitively
·Econometric models: systematic and random components
·Least squares estimator: the recipe (in simple
education production function case)
·Regression mechanics
·Properties of the least squares estimator
·Standard errors
(Aside: Monte-Carlo studies.)
·Hypothesis testing (and confidence intervals)
·Multiple regression (and omitted variables)
·Descriptive versus causal analysis.
4. Class
size reduction: Experimental evidence
* Krueger and Whitmore (2001), “The Effect of
Attending a Small Class in the Early Grades on College-Test Taking and Middle
School Test Results: Evidence from Project STAR,” Economic Journal.
5. Class
Size Reduction: Regression discontinuity
Angrist, Joshua D. and Victor Lavy (1999), “Using
Maimonides’ rule to estimate the effect of class size on scholastic achievement,”
Quarterly Journal of Economics, 114:
533-575.
6. Class
Size Reduction: Policy reforms (observational evidence)
Jepsen, Christopher, and
Steven Rivkin. 2009. “Class Size Reduction and Student Achievement: The
Potential Tradeoff between Teacher Quality and Class Size.” Journal of
Human Resources 44(1): 223–250.
David Sims (2008), “A Strategic Response to Class Size
Reduction: Combination Classes and Student Achievement in
7. Identification
– General Issues and Instrumental Variables
* Angrist, Joshua D. and Alan B. Krueger (2001),
“Instrumental Variables and the Search for Identification: From Supply and
Demand to Natural Experiments,” Journal
of Economic Perspectives, 15(4):
69-85.
8. Valuing
School Quality: Regression discontinuity designs
* Black, Sandra E. (1999), “Do Better Schools
Matter? Parental Valuation of Elementary
Education,” Quarterly Journal of Economics, May: 577-599.
9. Curriculum
reform: Difference-in-differences analysis
* Morin, Louis-Philippe (2010), “Estimating the
Benefit of High School for College-Bound Students: Evidence of Subject-Specific
Human Capital Accumulation,” mimeo,
10. School
Accountability Reforms
Macartney, Hugh (2010), latest version of “School
Accountability and Teacher Performance,” mimeo,
11. School
choice
* Hoxby, Caroline
Minter (2000), “Does Competition Among Public Schools Benefit Students and
Taxpayers?” American Economic Review 90(5): 1209-1238.
Bayer, Patrick, and Robert
McMillan (2011), “Choice and Competition in Local Education Markets,” revised
version of NBER Working Paper 11802.
Chan, Winnie and Robert McMillan (2011), “School
Choice and Public School Performance: Evidence from