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Do we have too many university graduates? What lifetime earnings profiles can tell us
Hrendash, Taras ; Jurajda, Štěpán ; Münich, Daniel ; Doleželová, P. ; Mrázek, P.
Since the beginning of the 21st century, the Czech Republic has experienced dynamic growth in its university-educated workforce. This trend was initially driven by the foundation and growth of private universities in the Czech Republic in the late 1990s, followed from 2005 onwards by a substantial opening-up of public universities. The share of the population aged between 30 and 34 with higher education has more than doubled over the course of three decades. From an economic perspective, do we now have too many university graduates in the Czech Republic? The answer to this question is crucial when it comes to deciding the extent to which the state should – financially or otherwise – support future growth in the numbers of university students and graduates, and how much it should encourage citizens to pursue initial or lifelong university education. The answer is also an important factor in debates about the need to increase the currently low financial support available to university students. The study we present here provides descriptive statistics about employees’ wages and salaries, which serve as a useful basis for any discussion of this important question. We compare trends in university-educated employees’ wages and salaries for cohorts born in 1960, 1970, 1980 and 1990. The shares of university graduates in these cohorts differ substantially. Further, we observe trends in the earnings ratio for these cohorts between university- and secondary-educated employees, i.e., the percentage differences between the mean or median earnings of employees with higher education and those of employees with only secondary education.
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Teacher salaries in 2022 and beyond: out of the abyss and back again
Münich, Daniel ; Smolka, Vladimír
The relative amounts of teachers‘ salaries helps to define the attractiveness of entering the teaching profession and can be a component in ensuring sufficient interest in the profession. Selectivity into teaching, both at entry and throughout the career, determines the quality of education. These processes are realised in the long term through continuous entries and exits from teaching, and ongoing training during the career. Therefore, the effects of teacher salaries on interest in entering the profession, the quality of teachers' work, and ultimately a country's educational outcomes can only be tracked over the long term.
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Social ties at work and effort choice: experimental evidence from Tanzania
Chegere, M. ; Falco, P. ; Menzel, Andreas
Many firms hire workers via social networks. Whether workers who are socially connected to their employers exert more effort on the job is an unsettled debate. We address this question through a novel experiment with small-business owners in Tanzania. Participants are paired with a worker who conducts a real-effort task, and receive a payoff that depends on the worker’s effort. Some business owners are randomly paired with workers they are socially connected with, while others are paired with strangers. With a design that is sufficiently powered to detect economically meaningful effects, we find that being socially connected to one’s employer does not affect workers’ effort.\n
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Sexual-orientation discrimination and biological attributions: experimental evidence from Russia
Baghumyan, Gayane
Understanding what drives discriminatory behavior is important in order to identify the best strategy to combat it. In this study, I exogenously manipulate participants’ beliefs about the origins of sexual orientation by providing evidence that supports biological causes of homosexuality. I employ money allocation tasks to measure discrimination. This allows me to causally identify the impact of information on discriminatory behavior. I first document the prevalence of discrimination against individuals with same-sex partners in Russia. On average, roughly 54% of participants exhibit discriminatory behavior against profiles with same-sex partners by allocating 16 percentage points less money to them. Further, the results suggest that exposure to evidence on the biological causes of homosexuality negatively affects discriminatory behavior. Participants in the treatment group allocate less money to profiles with same-sex partners, relative to participants in the baseline group. Potential rationales for this behavior could include the following: (i) the provision of information that contradicts existing beliefs might cause cognitive dissonance, triggering irritation and intensifying discriminatory tendencies, (ii) the information might foster beliefs that individuals in same-sex partnerships are fundamentally ’other’ - even at a biological level - thereby widening the perceived social gap between participants and these sexual minority groups and fostering discrimination further.
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The long-term impact of energy poverty and its mitigation on educational attainment: evidence from China
Martirosyan, Yervand
Existing studies demonstrate the short-run connection between environmental conditions and academic performance. However, the long-term effects of exposure to adverse living conditions on academic achievement remain underexplored. This study investigates the long-term impact of energy poverty, and policy interventions aimed at alleviating it, on the academic performance of Chinese schoolchildren starting from infancy. It specifically utilizes the Huai River Policy, which provides free winter heating exclusively to northern regions in China but not to adjacent southern regions. My findings suggest a significant positive influence of winter heating on schoolchildren’s academic performance, with a more pronounced effect for children born during winter months. The insights gained from this research could inform policy debates to enhance educational outcomes and human well-being.\n
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Quantitative easing in the euro area: implications for income and wealth inequality
Stojanović, Dušan
This study examines how and to what extent quantitative easing of the ECB affects household income and wealth inequality in the euro area. Previous theoretical models have investigated the dynamics of inequality measures through differential access of households to financial/capital market (the portfolio rebalancing channel), neglecting the labor market differential (the earnings heterogeneity channel). Although the portfolio rebalancing channel may provide insight into wealth inequality and non-labor income inequality, this is not the case with labor (and thus total) income inequality. To be in line with the empirical evidence on labor income inequality, this study also considers segmented labor market on the basis of capital-skill complementarity in production and asymmetric real wage rigidities. When only financial market segmentation is considered, the quantitative results indicate a drop in total income inequality that is diminished over time, while wealth inequality experiences a rise that gradually becomes weaker. The introduction of the segmented labor market significantly mitigates the observed drop in total income inequality, while a rise in wealth inequality is largely amplified. Given the possible broadening of the ECB’s mandate towards distributional issues in the future, the analysis of segmented labor and financial markets can be more beneficial to the ECB as it provides a clearer picture of the inequality effects.
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The effects of government spending in segmented labor and financial markets
Stojanović, Dušan
This paper develops a model with high-skilled and low-skilled workers to show the expansionary effects of government spending despite large training costs for new hires. The main idea is that a fiscal stimulus induces changes in the composition of the labor force conditional on the extent of aggregate demand pressure. A period of high aggregate demand pressure is followed by a high value of forgone output as training activity causes production disruption. In this period firms decide to hire more low-skilled workers, who constitute a cheaper part of the labor force. When aggregate demand pressure is diminished, firms switch to hiring more high-skilled workers. However, the current literature considers only high-skilled workers, who tend to increase saving in government bonds to protect against poor employment prospects. In this case, the combination of weak employment prospects and the crowding-out effects of higher lump-sum taxes and government debt on private consumption and capital investment gives rise to recessionary effects. In contrast, this paper provides a model with a more realistic labor and financial market structure and suggests that countercyclical government spending in the form of government consumption and especially government investment can be used to deal with recessions.\n
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Location choice and dispersal policies: Ukrainian war immigrants in the Czech Republic
Adunts, Davit ; Kurylo, Bohdana ; Špeciánová, J.
The large influx of Ukrainian immigrant refugees to the Czech Republic fleeing from the war has attracted the attention of many policymakers due to their unequal geographical distribution. The high concentration of refugees in some districts has the potential to burden the school and healthcare systems, as well as the housing market. This project aims to provide an explanation for the unequal distribution of refugees by studying the determinants of refugee location choices in the Czech Republic, including ethnic networks and employment prospects. We provided evidence of a positive association between the number of Ukrainian refugees and (i) the stock of previous Ukrainian immigrants (our measure of ethnic networks) and (ii) the number of available job positions. In addition, we conducted a review of previous studies on the effectiveness of dispersal policies and determined that such policies exert ambiguous effects on refugee labor market integration. Hence, dispersal policies need to consider the integration of refugees and their intentions to remain in the country.
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