Investing in the Future

Investing in the Future | (News and Research 379)

Compulsory Education boosts Learning Outcomes and Climate Action | What if there was an investment that could not only reduce greenhouse gas emissions but also improve education outcomes? It is often said that people with more education are more likely than others to understand the complexities of climate science and to take actions in response to the climate emergency. We are now able to prove that proposition. Our recent research has shown that an additional year of education substantially increases people’s pro-climate beliefs, behaviors, and policy preferences. This is good news, but increasing educational attainment has a further crucial benefit – it can help to solve the global learning crisis that was exacerbated by the COVID-19 pandemic school closures.

Investing in Colombia’s Future: How Innovative Financing Unlocked Higher Education | In 2002, the World Bank and Colombia’s national student loan agency ICETEX partnered to overcome challenges in higher education by financing long-term loans for students from disadvantaged backgrounds. The Program had a transformative impact on Colombia’s human capital, enabling over 623,000 Colombians access higher education in the last two decades, with students from disadvantaged backgrounds reaching 90 percent in 2023. The cornerstone of the Program: a robust loan structure that aligned World Bank loan terms to students’ capacities to repay their loans to ICETEX.

When an Assessment System Works to Improve Learning: The Case of Sobral | Luna-Bazaldua, Cruz | Students in the Brazilian municipality of Sobral have made remarkable progress in foundational learning, surpassing national trends. Systematic learning assessments and the accountability they foster are central to this success. Let’s take a closer look at Sobral’s education reform. In 2005, student learning outcomes in Sobral lagged behind the national average. Yet, through the right policy reforms and targeted interventions, Sobral not only reversed this trend but also significantly accelerated learning, even after adjusting for learning losses due to the COVID-19 pandemic.

The Economics of Eye Glasses | NPR, PLOS ONE | Reading glasses are easy to come by in Western countries. But getting a pair in the Global South can be a challenge. A new study shows the surprising benefits that a pair of specs can bring. In Bangladesh, provision of reading glasses increases income in near vision-intensive occupations and may facilitate return to work for those currently unemployed.

Blended Finance | Flammer, Giroux, Heal | NBER | Blended finance—the use of public and philanthropic funding to crowd in private capital—is a potential way to finance a more sustainable world. While blended finance holds the promise of being catalytic in mobilizing vast amounts of private capital, little is known about this practice. In this paper, we provide a conceptual framework that formalizes the decision-making of development finance institutions (DFIs) that engage in blended finance. We then provide empirical evidence on blended finance using data from a major DFI. The key variable we study is the level of concessionality, which captures the subsidy from the blended co-investment. Our findings indicate that DFIs provide higher concessionality for projects that have a higher sustainability impact per dollar invested. Moreover, the concessionality is higher for projects in countries with higher political risk and a higher degree of information asymmetries. In such cases, the blending tends to also include risk-management provisions. These findings are consistent with the predictions from our conceptual framework, in which DFIs have a limited budget that they allocate across projects to create societal value. This paper uses IFC data and there are quite a few education deals included.

COVID-19 Learning Loss and Recovery in Brazil: Assessing Gaps across Social Groups | Miranda, Baum | Results suggest that school closures led to learning losses in math for high school seniors in public schools in the Federal District (DF) in Brazil. And while all racial groups experienced learning loss, White and Asian students experienced the most significant losses in 2020. There is no evidence of learning recovery from 2020 to 2021 for any racial groups, suggesting that learning losses persisted into school reopening. There are, however, possible signs of recovery for female senior students compared to male students.

COVID-19 Learning Loss and Recovery | Singh,  Romero,  Muralidharan | A panel survey of 19,000 primary-school-aged children in rural Tamil Nadu is used to study learning loss after COVID-19-induced school closures, and the pace of recovery after schools reopened. Students tested in December 2021 (18 months after school closures) displayed learning deficits of 0.73 standard deviations (SD) in math and 0.34 SD in language compared to identically-aged students in the same villages in 2019. Two-thirds of this deficit was made up within 6 months after schools reopened. Further, while learning loss was regressive, recovery was progressive. A government-run after-school remediation program contributed 24% of the cohort-level recovery, likely aiding the progressive recovery.

Female Education and Social Change | Bühler, Vollmer, Wimmer | Does access to education facilitate the emergence of a human capital elite from which social activists, and thus, social change can emerge? Assembling a city-level panel of the political, intellectual, and economic elite throughout German history, this study finds that the opening of schools providing secondary education for women increased their representation among the human capital elite. These elites challenged the status quo and developed critical ideas that resonated in cities with higher human capital, connecting women to form a social movement.

New Developments in the Economics of Education | Exciting opportunity to present your research on the economics of education at the Public Sector Economics 2024 Conference September 23, 2024, in Zagreb, Croatia. Submit proposals by May 15 here. Keynote speakers:  Daniele Checchi, University of Milan, Italy andHarry Anthony Patrinos, World Bank.