How Responsive is Investment in Schooling to Changes in Redistributive Policies and in Returns?

Ran Abramitzky and Victor Lavy
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Ran Abramitzky: Stanford University

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: This paper uses an unusual pay reform to test the responsiveness of investment in schooling to changes in redistribution schemes that increase the rate of return to education. We exploit an episode where different Israeli kibbutzim shifted from equal sharing to productivity-based wages in different years and find that students in kibbutzim that reformed earlier invested more in high school education. This effect is stronger for males and is largely driven by students whose parents have lower levels of education. We also show that, in the long run, students in kibbutzim that reformed earlier were more likely to complete post-high school academic colleges. Our findings support the prediction that education is highly responsive to changes in the redistribution policy, especially for students from weaker backgrounds.

Keywords: kibbutzim; education; Redistributive Policies. (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-dem and nep-edu
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Citations: View citations in EconPapers (1)

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http://www2.warwick.ac.uk/fac/soc/economics/resear ... ns/150-2013_lavy.pdf

Related works:
Journal Article: How Responsive Is Investment in Schooling to Changes in Redistributive Policies and in Returns? (2014)
Working Paper: How Responsive is Investment in Schooling to Changes in Redistribution Policies and in Returns (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:150

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