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Unintended Negative Consequences of Rewards for Student Attendance

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n an experiment in non-formal schools in Indian slums, an incentive for attending a target number of school days increased average attendance when the incentive was in place, but had heterogeneous effects after it was removed. Among students with high baseline attendance, the post-incentive attendance returned to previous levels and test scores were unaffected. Among students with low baseline attendance, post-incentive attendance dropped even below previous levels, and test scores decreased . . . 

Inequality and Markets: Some Implications of Occupational Diversity

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This paper characterizes long run income distribution in a competitive economy with borrowing constraints. Parents decide both on financial bequests and investments in their children's education. The occupational structure is "rich": there is a continuum of occupations with varying entry costs that are imperfect substitutes in the production process. Occupational returns are endogenously determined by market conditions. If the span of occupational investments is wide enough, the wealth distribution is non- degenerate and long-run inequality arises. In this case, the average return to education must rise with the level of educational investment - the return to human capital is endogenously nonconcave. This finding, which contrasts with the usual presumption that the private return to human capital is decreasing, constitutes the central empirically testable proposition of this paper.
Dilip Mookherjee, Boston University and Debraj Ray, NYU

A Remark on Color-Blind Affirmative Action

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Elite colleges and universities in the United States have recently faced a number of legal challenges that restrict their use of explicitly race-contingent admissions policies. Since these institutions continue to seek broad representation from different social groups (and to view campus diversity as an essential ingredient in the provision of a first-rate education), they have strong incentives to adjust their admissions criteria in order to attain diversity goals through less direct means. There is considerable evidence that this process is well underway, and a literature dealing with the efficiency implications of color-blind affirmative action policies has emerged . . . 

Is the Brain Drain Good for Africa?

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We build upon recent literature to do several exercises to assess benefits and costs of the brain drain to Africa. Contrary to a lot of the worries expressed in the media and in aid agencies, the brain drain is probably a net benefit to the source countries. We make several arguments: (1) the African brain drain is not large enough to have much effect on Africa’s skill gap relative to the rest of the world. Since other regions had a larger brain drain, the skill gap between Africa and the rest would actually be larger in a counterfactual world of NO brain drain with the same amount of skill creation. (2) The gains to the migrants themselves and their families who receive indirect utility and remittances more than offset the losses of the brain drain . . . 
William Easterly, NYU and Yaw Nyarko, NYU

Monitoring Works: Getting Teachers to Come to School

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In the rural areas of developing countries, teacher absence is a widespread problem. This paper tests whether a simple incentive program based on teacher presence can reduce teacher absence, and whether it has the potential to lead to more teaching activities and better learning. In 60 informal one-teacher schools in rural India, randomly chosen out of 120 (the treatment schools), a financial incentive program was initiated to reduce absenteeism . . . 
Rema Hanna, Wagner School of Public Service, New York University; Esther Duflo, Department of Economics, MIT