Program on Children.

• Author: Gruber, Jonathan

Jonathan Gruber [*]

Policymakers and the public in general have shown intense interest in recent years in issues related to the well-being of children. For example, the 1997 Children's Health Insurance program, which potentially made millions of new children eligible for public health insurance, was the single largest health insurance coverage expansion of the past 30 years. Debates over crime, the justice system, and access to guns, particularly in the wake of recent school shootings, have especially focused on juvenile crime. The comprehensive tobacco regulation legislation proposed by the Clinton administration in 1998 was aimed primarily at reducing youth smoking. And education policy, in particular questions of school choice and the federal role in regulating education decisions, is a central issue in this year's presidential elections.

The NBER's Program on Children aims to take advantage of this growing interest and the expertise among academic economists in issues related to child well-being. It has benefited from an Integrated Research Program Grant from the National Institute of Child Health and Human Development, through which a number of our researchers have found sponsorship for their work. In this report, I summarize the activities of the Program over the past several years. These activities have focused on five broad areas: education, transfer programs, family structure, youth employment, and risky behaviors.

Education

Education is a centerpiece of the work done by members of the Program on Children. They have focused in particular on assessing the benefits to youths from different types of educational interventions, either contemporaneously in terms of test scores or other educational outcomes, or in the long run in terms of improved labor market prospects.

A central research question in labor economics is: what is the rate of return to additional years of education? But a fundamental difficulty with answering tat question is tat years of education are not assigned randomly to individuals but rater are chosen, and these educational choices may be correlated with the individual's underlying ability. Orley C. Ashenfelter and Cecilia E. Rouse attempt to address this issue by using data from a sample of twins to control for underlying differences in ability across families. They confirm that there is a substantial rate of return to an additional year of education, in the form of a 9 percent rise in earnings. [1] Work by John Cawley, James J. Heckman, and Edward Vytlacil implicitly confirms this conclusion, noting that the rising return to education in recent years is not attributable solely to a rising return to ability [2]

One way to increase the educational attainment of high school dropouts is through the General Educational Development (GED) degree. But again, one cannot simply compare the outcomes of those with and without GED degrees, because it may be only dropouts with higher ability who go on to take this additional educational step. John H. Tyler, Richard J. Murnane, and John R. Willett take into account variations in state standards for attaining a GED degree; they find substantial returns to a GED degree, including an increase in earnings of 10-19 percent. [3] These returns are concentrated in the least able GED recipients. [4]

How might governments improve the quality of a given level of education, and thereby raise the return to any level of attainment? Perhaps they could reduce the number of pupils per teacher in the classroom. Alan B. Krueger evaluates an influential social experiment run by the state of Tennessee in which some children were assigned randomly to smaller size classrooms. He finds that these children perform significantly better than the other students on exams as youths and are more likely to take (and do well on) college entrance examinations as teens. [5] This effect is particularly large for minority students, with small classes cutting in half the black/white gap in college test taking. Anne Case and Motohiro Yogo similarly find significant benefits of smaller class sizes for blacks in South Africa. [6]

On the other hand, Caroline M. Hoxby notes that real variations in pupil--teacher ratios arise from the natural variation in the population of school-age children; she finds that these class-size variations have no impact on student outcomes. [7] Erik A. Hanushek, John F. Kain, and Steven G. Rivkin conclude that, while smaller classes do appear to provide a modest benefit for lower income children in earlier grades, their effects are small relative to the effects of changing teacher quality [8] Paying teachers more does not greatly improve teacher quality though, according to these three economists; the primary determinant of teacher quality appears to be the quality of the student body being instructed. [9] Finally, Joshua D. Angrist and Victor Lavy find that in Israel increasing teacher training induced significant improvements in student achievement and may have been more cost effective than reducing class sizes. [10]

A significant component, perhaps the majority of the rise in educational spending in recent years has been the special educational resources devoted to disabled students. Hanushek, Kain, and Rivkin find that more spending on special education students significantly improves the outcomes of those students without lowering the outcomes of regular education students. [11] But Julie B. Cullen notes that financial incentives for labeling students as disabled lead to more students being served in special education, suggesting an important trade-off for policy design in this area. [12]

Another contentious area of educational policy has been school choice and the availability of vouchers, which parents can use to pay for an alternative to their local public school. Rouse evaluates a targeted voucher program in Milwaukee and finds that it had positive effects on student...