Bank of England Working Paper No. 461 by Renato Faccini (Queen Mary, University of London)and Chiara Rosazza Bondibene (NIESR and Royal Holloway, University of London) published August 2012
Abstract
Using publicly available data for a group of 20 OECD countries, we find that the cyclical volatility of the unemployment rate exhibits substantial cross-country and time variation. We then investigate empirically whether labour market institutions can account for this observed heterogeneity and find that the impact of various institutions on cyclical unemployment dynamics is quantitatively strong and
statistically significant.
The hypothesis that labour market institutions could increase the volatility of
unemployment by reducing match surplus is not supported by the data. In fact, unemployment benefits, taxation and employment protection appear to reduce the volatility of unemployment rates.
In addition, we find that the precise nature of union bargaining has important implications for cyclical unemployment dynamics, with union coverage and density having large and offsetting effects.
Finally, we provide evidence suggesting that interactions between shocks and institutions matter for cyclical unemployment fluctuations. However, institutions only account for about one quarter of the explained variation, which implies that they are important but they are not the entire story.
JEL classifications: E32, E6, J01, J08
Full text (PDF 46pp)
Wednesday, 12 September 2012
Student Awareness of Costs and Benefits of Educational Decisions: Effects of an Information Campaign
a paper (CEE DP 139) by Martin McGuigan (Queen’s Management School, Belfast), Sandra McNally (University of Surrey, London School of Economics and Centre for the Economics of Education) and Gill Wyness (Centre for the Economics of Education and CentreForum) published by Centre for the Economics of Education (August 2012)
Executive Summary
The economic benefits of staying on in education have been well established.
But do students know this? One of the reasons why students might drop out of education too soon is because they are not well informed about the costs and benefits of staying on in education at an appropriate time of their educational career. Indeed, the fact that university fees have trebled in recent times (in England) have led to fears that many young people may be put off from participating in further and higher education – especially those from low income backgrounds. This could exacerbate inequalities that are already very stark.
In this paper, we investigate students’ knowledge and their receptiveness to information campaigns about the costs and benefits of staying on in education. We design an “information campaign” that provides some simple facts about economic and financial aspects of educational decisions and test students’ response to this campaign. The fieldwork for our information campaign mainly took place over the first two terms of 2010-2011 - the period in which the trebling of university fees was announced (amid much controversy). This provided us with an opportunity to measure students’ receptiveness to the surrounding publicity in the media.
The material for our information campaign consists of a (password protected) website, materials that can be used by the teacher (a video and presentation) and a one page flyer that can be handed out to students. The materials used in the research are now publicly available at http://www.whats4.me.uk/.
All secondary schools in London were invited to take part in our study. Over 12,000 pupils from 54 schools took part in the main evaluation which took place over the school year 2010-2011. Within each school, all Year 10 students (i.e. 14/15-year-olds) completed a 40-minute survey (under exam conditions). They were then given a very similar survey to complete 8-12 weeks later. In between the two periods, some schools were given information materials whereas other schools were given the materials some time later (after their students had completed the second survey). Schools were randomly assigned into two groups – with “treatment” schools getting the materials between the two surveys and “control schools” getting the materials some time later. The purpose was to test whether students in treatment schools showed any change in knowledge and aspirations 8-12 weeks later compared to students in the control schools. We also looked at the relationship between the number of media reports on tuition fees (on the BBC website) and students’ knowledge and aspirations at the time of each survey. One crucial difference between our information campaign and the media reporting is that the latter emphasised the huge rise in university fees, without always giving emphasis to the favourable terms of loans and the availability of grants.
We chose Year 10 because these students do their GCSE exams one year later (Year 11), as well as make important decisions on what to do subsequently. The participating schools were above average in terms of GCSE performance and were relatively less deprived (in terms of percentage of students eligible to receive free school meals). The results indicate that students in participating schools have significant gaps in their basic knowledge about the costs and benefits of staying in education and going to university. However, the information experiment and media reporting worked in the same direction for knowledge of when fees are paid, increasing the probability of correctly understanding the basics of when fees are paid by 5.8 and 9 percentage points respectively (from a baseline of 46% of students, who knew the right answer in the first survey). Moreover, our information experiment increased the probability of agreeing that “student loans are a cheaper/better way to borrow money than other types of borrowing” by 7.6 percentage points (from a baseline of 48.6%) while media reporting had no effect.
For the perceived importance of financial constraints on staying in education, the information experiment and media reporting had opposite effects. Our information campaign led students to think that staying in education would be affordable (loan conditions and grants were carefully explained) whereas media reporting led students to think that going to university would be “too expensive”. For example, the proportion of students put off by financial aspects of university fell by 5 percentage points.
Media reporting, on the other hand, increased the negative perceptions of affordability in all cases, with, for example, the proportion of students put off by financial aspects of university increasing by 6.5 percentage points. This is a sizeable impact when put alongside the baseline levels of agreement of 25.7%.
On knowledge about the benefits of staying in education, media reporting had no effect that is statistically different from zero. But the information experiment increased the probability that students perceive that they have a better chance of getting a job if they stay in education to the age of 18 or if they go to university. At the same time, the information experiment reduced the probability of agreeing with (incorrect) statements about choice of subject and university.
Finally, the information experiment had an impact on whether students plan to stay in education - but no impact on university intentions. But the effect of media reporting was to reduce the probability of stating &ldquoit is very likely I will ever apply to university to do a degree” by four percentage points.
Our results indicate that media reporting and a fairly ‘light-touch’ information campaign have quite sizeable effects on student attitudes – at least in the short-term. Of course, this does not necessarily translate into behaviour. But there is certainly a strong correlation between students’ attitudes and their subsequent behaviour (as we show using the Longitudinal Survey of Young People in England). If there is a chain of causation between student beliefs about the affordability of higher education and how hard they work to ensure they can access opportunities, then informing students properly might also be a way of improving performance at GCSE.
All the indications are that the hike in fees in late 2010 (and specifically, media reporting of the changes) increased the perception of going to university as ‘too expensive’. This perception was significantly higher in comprehensive schools (compared with independent and selective state schools) and among children eligible for free school meals. If these perceptions influence effort at school or behaviour post-16, this will increase socio-economic inequality in the future.
On the positive side, a fairly light-touch information campaign in schools can reverse some of these negative effects. It can give a more rounded view of the reforms – stressing the availability of grants and how loans can be repaid – rather than focusing on the increase in fees per se. An information campaign like the one used in this project can be effective at a low cost. However, we should not assume that information gets conveyed in the right way – or at all – to students. Policy attention should focus on the incentives that schools have to invest time and effort in providing careers information (which is not regulated and does not influence ‘league tables’) as well as available resources to ensure that information is conveyed in an appropriate way.
Full text (PDF 57pp)
Executive Summary
The economic benefits of staying on in education have been well established.
But do students know this? One of the reasons why students might drop out of education too soon is because they are not well informed about the costs and benefits of staying on in education at an appropriate time of their educational career. Indeed, the fact that university fees have trebled in recent times (in England) have led to fears that many young people may be put off from participating in further and higher education – especially those from low income backgrounds. This could exacerbate inequalities that are already very stark.
In this paper, we investigate students’ knowledge and their receptiveness to information campaigns about the costs and benefits of staying on in education. We design an “information campaign” that provides some simple facts about economic and financial aspects of educational decisions and test students’ response to this campaign. The fieldwork for our information campaign mainly took place over the first two terms of 2010-2011 - the period in which the trebling of university fees was announced (amid much controversy). This provided us with an opportunity to measure students’ receptiveness to the surrounding publicity in the media.
The material for our information campaign consists of a (password protected) website, materials that can be used by the teacher (a video and presentation) and a one page flyer that can be handed out to students. The materials used in the research are now publicly available at http://www.whats4.me.uk/.
All secondary schools in London were invited to take part in our study. Over 12,000 pupils from 54 schools took part in the main evaluation which took place over the school year 2010-2011. Within each school, all Year 10 students (i.e. 14/15-year-olds) completed a 40-minute survey (under exam conditions). They were then given a very similar survey to complete 8-12 weeks later. In between the two periods, some schools were given information materials whereas other schools were given the materials some time later (after their students had completed the second survey). Schools were randomly assigned into two groups – with “treatment” schools getting the materials between the two surveys and “control schools” getting the materials some time later. The purpose was to test whether students in treatment schools showed any change in knowledge and aspirations 8-12 weeks later compared to students in the control schools. We also looked at the relationship between the number of media reports on tuition fees (on the BBC website) and students’ knowledge and aspirations at the time of each survey. One crucial difference between our information campaign and the media reporting is that the latter emphasised the huge rise in university fees, without always giving emphasis to the favourable terms of loans and the availability of grants.
We chose Year 10 because these students do their GCSE exams one year later (Year 11), as well as make important decisions on what to do subsequently. The participating schools were above average in terms of GCSE performance and were relatively less deprived (in terms of percentage of students eligible to receive free school meals). The results indicate that students in participating schools have significant gaps in their basic knowledge about the costs and benefits of staying in education and going to university. However, the information experiment and media reporting worked in the same direction for knowledge of when fees are paid, increasing the probability of correctly understanding the basics of when fees are paid by 5.8 and 9 percentage points respectively (from a baseline of 46% of students, who knew the right answer in the first survey). Moreover, our information experiment increased the probability of agreeing that “student loans are a cheaper/better way to borrow money than other types of borrowing” by 7.6 percentage points (from a baseline of 48.6%) while media reporting had no effect.
For the perceived importance of financial constraints on staying in education, the information experiment and media reporting had opposite effects. Our information campaign led students to think that staying in education would be affordable (loan conditions and grants were carefully explained) whereas media reporting led students to think that going to university would be “too expensive”. For example, the proportion of students put off by financial aspects of university fell by 5 percentage points.
Media reporting, on the other hand, increased the negative perceptions of affordability in all cases, with, for example, the proportion of students put off by financial aspects of university increasing by 6.5 percentage points. This is a sizeable impact when put alongside the baseline levels of agreement of 25.7%.
On knowledge about the benefits of staying in education, media reporting had no effect that is statistically different from zero. But the information experiment increased the probability that students perceive that they have a better chance of getting a job if they stay in education to the age of 18 or if they go to university. At the same time, the information experiment reduced the probability of agreeing with (incorrect) statements about choice of subject and university.
Finally, the information experiment had an impact on whether students plan to stay in education - but no impact on university intentions. But the effect of media reporting was to reduce the probability of stating &ldquoit is very likely I will ever apply to university to do a degree” by four percentage points.
Our results indicate that media reporting and a fairly ‘light-touch’ information campaign have quite sizeable effects on student attitudes – at least in the short-term. Of course, this does not necessarily translate into behaviour. But there is certainly a strong correlation between students’ attitudes and their subsequent behaviour (as we show using the Longitudinal Survey of Young People in England). If there is a chain of causation between student beliefs about the affordability of higher education and how hard they work to ensure they can access opportunities, then informing students properly might also be a way of improving performance at GCSE.
All the indications are that the hike in fees in late 2010 (and specifically, media reporting of the changes) increased the perception of going to university as ‘too expensive’. This perception was significantly higher in comprehensive schools (compared with independent and selective state schools) and among children eligible for free school meals. If these perceptions influence effort at school or behaviour post-16, this will increase socio-economic inequality in the future.
On the positive side, a fairly light-touch information campaign in schools can reverse some of these negative effects. It can give a more rounded view of the reforms – stressing the availability of grants and how loans can be repaid – rather than focusing on the increase in fees per se. An information campaign like the one used in this project can be effective at a low cost. However, we should not assume that information gets conveyed in the right way – or at all – to students. Policy attention should focus on the incentives that schools have to invest time and effort in providing careers information (which is not regulated and does not influence ‘league tables’) as well as available resources to ensure that information is conveyed in an appropriate way.
Full text (PDF 57pp)
The changing influence of culture on job satisfaction across Europe: 1981-2008
a paper by Gail Pacheco (Auckland University of Technology, New Zealand), De Wet van der Westhuizen (Telecom, New Zealand) and Don J. Webber (University of the West of
England, Bristol, UK) published by AUT University Faculty of Business and Law in the Department of Economics Working Paper Series as 2012/06
Abstract
This paper contributes to the growing multi-disciplinary body of literature on subjective well-being by investigating the temporal stability and impacts of cultural values on job satisfaction over time. It is generally believed that cultural values evolve fairly slowly, leading to the expectation that the impacts of these values on job satisfaction are likely to be fairly stable over an individual’s working life. This paper uses four waves of the European Values Study and investigates whether cultural values have evolved and whether their impacts on job satisfaction have changed across Europe over the period 1981-2008.
We parameterise cultural values through reference to traditional vs. secular and survival vs. self-expression value continuums. Results indicate that the strength of many cultural values have declined, the impacts of traditional values on job satisfaction have remained fairly constant, and the impacts of survival values on job satisfaction have declined substantially over the sample period.
JEL Classification: J28
Full text (PDF 33pp)
Abstract
This paper contributes to the growing multi-disciplinary body of literature on subjective well-being by investigating the temporal stability and impacts of cultural values on job satisfaction over time. It is generally believed that cultural values evolve fairly slowly, leading to the expectation that the impacts of these values on job satisfaction are likely to be fairly stable over an individual’s working life. This paper uses four waves of the European Values Study and investigates whether cultural values have evolved and whether their impacts on job satisfaction have changed across Europe over the period 1981-2008.
We parameterise cultural values through reference to traditional vs. secular and survival vs. self-expression value continuums. Results indicate that the strength of many cultural values have declined, the impacts of traditional values on job satisfaction have remained fairly constant, and the impacts of survival values on job satisfaction have declined substantially over the sample period.
JEL Classification: J28
Full text (PDF 33pp)
Which? launches university comparison website
by Jack Grove via News from THE
Which? University, a free independent site, features details of almost 30,000 courses and 262 universities and colleges.
The website allows students to compare courses by price, graduate salaries, required A-level grades and the percentage of applicants who receive an offer to study.
It also uses data from student opinion polls to rate universities by their political scene, sports facilities and nightlife.
Continue reading here
Note that Which? executive director Richard Lloyd said: “It’s worrying how many people are making one of the biggest decisions of their lives without proper guidance or advice.”
The site is available at www.which.co.uk/university
It appears to be using JACS2 as its subject classification system although the list provided is alphabetic not hierarchical and would, therefore, be more time consuming to check.
THE says that
I say: Don't forget PUSH ably managed by Johnny Rich.
Which? University, a free independent site, features details of almost 30,000 courses and 262 universities and colleges.
The website allows students to compare courses by price, graduate salaries, required A-level grades and the percentage of applicants who receive an offer to study.
It also uses data from student opinion polls to rate universities by their political scene, sports facilities and nightlife.
Continue reading here
Note that Which? executive director Richard Lloyd said: “It’s worrying how many people are making one of the biggest decisions of their lives without proper guidance or advice.”
The site is available at www.which.co.uk/university
It appears to be using JACS2 as its subject classification system although the list provided is alphabetic not hierarchical and would, therefore, be more time consuming to check.
THE says that
Universities are due to publish their own information about courses at the end of the month when the Key Information Sets are launched.and that:
Other existing comparison sites include bestcourse4me.com, established by the educational philanthropist Steve Edwards.
I say: Don't forget PUSH ably managed by Johnny Rich.
Have you ever had one of those days?
I had not realised what was happening to me until it was nearly over. The mental health “wobble” of last week was, I thought, completely behind me and I posted six items on Monday without too much difficulty.
Tuesday, as in yesterday, was altogether different. I knew that a visit to the vet with little dog and then shopping on the way home would mean a late start but it wasn't until I’d coped with a couple of phone calls and done some reading that I realised the working day was just about over.
Wednesday, that’s today. It’s already eleven o’clock and I have little to show for having been sitting at my desk for well over an hour.
Talking to myself – is not the first sign of madness.
Thanks for listening.
Tuesday, as in yesterday, was altogether different. I knew that a visit to the vet with little dog and then shopping on the way home would mean a late start but it wasn't until I’d coped with a couple of phone calls and done some reading that I realised the working day was just about over.
Wednesday, that’s today. It’s already eleven o’clock and I have little to show for having been sitting at my desk for well over an hour.
Talking to myself – is not the first sign of madness.
Pump up the determination levels, the confidence levels and attack the backlog of drafts waiting to be shared before they get so old that it’s not worth the effort.
Thanks for listening.
Monday, 10 September 2012
The role of personality traits, core self-evaluation, and emotional intelligence in career decision-making difficulties
an article by Annamaria Di Fabio and Letizia Palazzeschi (Department of Psychology, University of Florence, Italy) and Reuven Bar-On (Department of Psychiatry and Behavioral Sciences, University of Texas Medical Branch) published in Journal of Employment Counseling Volume 49 Issue 3 (September 2012)
Abstract
This study examines the role of personality traits, core self-evaluation, and emotional intelligence (EI) in career decision-making difficulties.
Italian university students (N= 232) responded to questions on the Big Five Questionnaire, Core Self-Evaluation Scale, Bar-On Emotional Quotient Inventory, and Career Decision-Making Difficulties Questionnaire.
It was found that EI adds significant incremental variance compared with personality traits and core self-evaluation in predicting career decision-making difficulties. The results draw attention to the unique role of EI in career decision-making difficulties, offering new research opportunities and intervention possibilities.
Abstract
This study examines the role of personality traits, core self-evaluation, and emotional intelligence (EI) in career decision-making difficulties.
Italian university students (N= 232) responded to questions on the Big Five Questionnaire, Core Self-Evaluation Scale, Bar-On Emotional Quotient Inventory, and Career Decision-Making Difficulties Questionnaire.
It was found that EI adds significant incremental variance compared with personality traits and core self-evaluation in predicting career decision-making difficulties. The results draw attention to the unique role of EI in career decision-making difficulties, offering new research opportunities and intervention possibilities.
Accounting for changes in income inequality: Decomposition analyses for Great Britain, 1968-2009
a research paper (No. 2012-17) by Mike Brewer (Institute for Social and Economic Research, University of Essex and Institute for Fiscal Studies) and Liam Wren-Lewis (Overseas Development Institute Fellow and ECARES, Université Libre de Bruxelles) published by Institute for Social and Economic Research
Non-technical summary
It is widely known that household income inequality in the UK is much higher than it was thirty years ago. However, the rise over this period has not been even. Instead, on many measures income inequality rose very quickly during the 1980s, and has changed little since 1991. This is all the more puzzling given the fact that individual wage and earnings inequality rose fairly steadily over the period, at least until 2000. These patterns are different from the US, where income inequality has continued to rise along with earnings inequality. This article investigates these recent changes in income inequality, which have remained relatively understudied compared with changes in earnings or wage inequality. We address the question “why did income inequality rise very rapidly over the period 1978 to 1991 but then remain relatively flat thereafter?”
To answer these questions, we decompose changes in income inequality into the contributions from different factors. We first decompose income inequality according to the income sources which have contributed to changing inequality (earnings from employment, investment income, state benefits, etc): this allows us to assess the share of changes in total inequality attributable to each income source. We then focus on decomposing inequality according to household characteristics which we expect to influence income (such as age, education, sex, and so on).
We find that inequality in employment and self-employment income amongst the economically active grew both before and after 1991, but, since 1991, a number of factors have mitigated the effect of this on inequality in total income. First, inequality between those with different employment statuses has fallen since 1991, primarily due to a fall in the number of unemployed people. Second, employment taxes have played a larger role since 1991 in mitigating the increase in inequality of gross employment income than they did before 1991. Third, investment income has become less unequal since 1991, largely due to the decline in its importance, which itself may be explained by a fall in nominal interest rates. Finally, a rise in the relative incomes of pensioners and households with children under five has pulled inequality down. Overall, these four factors have almost entirely offset the impact of the rise in earnings and self-employment income inequality since 1991.
Full text (PDF 46pp)
Non-technical summary
It is widely known that household income inequality in the UK is much higher than it was thirty years ago. However, the rise over this period has not been even. Instead, on many measures income inequality rose very quickly during the 1980s, and has changed little since 1991. This is all the more puzzling given the fact that individual wage and earnings inequality rose fairly steadily over the period, at least until 2000. These patterns are different from the US, where income inequality has continued to rise along with earnings inequality. This article investigates these recent changes in income inequality, which have remained relatively understudied compared with changes in earnings or wage inequality. We address the question “why did income inequality rise very rapidly over the period 1978 to 1991 but then remain relatively flat thereafter?”
To answer these questions, we decompose changes in income inequality into the contributions from different factors. We first decompose income inequality according to the income sources which have contributed to changing inequality (earnings from employment, investment income, state benefits, etc): this allows us to assess the share of changes in total inequality attributable to each income source. We then focus on decomposing inequality according to household characteristics which we expect to influence income (such as age, education, sex, and so on).
We find that inequality in employment and self-employment income amongst the economically active grew both before and after 1991, but, since 1991, a number of factors have mitigated the effect of this on inequality in total income. First, inequality between those with different employment statuses has fallen since 1991, primarily due to a fall in the number of unemployed people. Second, employment taxes have played a larger role since 1991 in mitigating the increase in inequality of gross employment income than they did before 1991. Third, investment income has become less unequal since 1991, largely due to the decline in its importance, which itself may be explained by a fall in nominal interest rates. Finally, a rise in the relative incomes of pensioners and households with children under five has pulled inequality down. Overall, these four factors have almost entirely offset the impact of the rise in earnings and self-employment income inequality since 1991.
Full text (PDF 46pp)
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