Essays on the economics of education

This dissertation explores the factors that affect students’ human capital accumulation, both inside and outside the classroom. Its three chapters examine how student-to-student interactions, student-teacher interactions, and education policies influence a wide range of student outcomes, including both cognitive and non-cognitive skills. The first and third chapters are independent empirical studies authored solely by me, while the second chapter is co-authored with Jiuchen Deng. In Chapter 1, I investigate the effects of ethnic minority peers on students' cognitive and non-cognitive outcomes, highlighting the role of teachers in this process. Leveraging the random assignment of students to different classes in Chinese middle schools, I find that a higher proportion of ethnic minority peers significantly lowers test scores, self-assessment scores, and persistence levels of both majority and minority students. The investigation of the mechanism indicates that when there is a higher proportion of ethnic minority peers, majority students tend to perceive a worse classroom environment and spend more time on out-of-school learning activities, which may reflect their parents’ efforts to compensate for the perceived lower quality of in-school education. Teacher behavior, assessed through feedback, attitude, effort, and teaching style, indicates that in classrooms with a higher proportion of ethnic minority students, teachers exhibit less patience and provide less feedback. These findings underscore the crucial role of teachers in promoting integration within increasingly diverse schools. In Chapter 2, my coauthor and I develop a two-period discrete choice model to examine college attendance decisions, accounting for the new dynamic in which children's pursuit of higher education has become increasingly independent of parental income transfers across all ethnic and income groups in the U.S. Our model treats higher education not as a tool for income transfer from parents to children, but as an independent decision made by children to maximize their lifetime utility. Even in an economy where all students finance their education through borrowing, we find substantial disparities in college access and quality between students from lower- and higher-income backgrounds. These inequalities are primarily driven by differences in the quality of pre-college education. Moreover, universally lowering tuition prices amplifies the inequality in college enrollment and quality. Our findings suggest that the most effective way to narrow the gap between students from low- and high-income families is to improve the quality of pre-college for disadvantaged children. In Chapter 3, I examine the effects of teachers holding mental health training licenses on students' academic and non-academic outcomes. Leveraging the random assignment of Chinese middle school students to different classes, I find that students whose Math and Chinese teachers hold mental health training licenses have better academic performance in those subjects. In addition, students whose head teachers possess a mental health training license tend to have lower mental stress level and report higher levels of social acclimation and satisfaction. Differences in teacher behavior may serve as the primary mechanism, as students with more teachers holding a mental health training license are less likely to feel ignored or criticized and more likely to feel supported when facing mental health issues. In this dissertation, I used ChatGPT to improve the English. The prompt I used was: “Review the English grammar in the following paragraph and provide suggestions to improve it.”

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Economics

Grantor

University of Illinois Urbana-Champaign

Year dc:date

2025

Author dc:creator

• Bao, Yue

Contributors dc:contributor

• Miller, Nolan
• Weinstein, Russell
• Powers, Elizabeth
• Thornton, Rebecca

• Human capital accumulation
• Peer effects
• Higher education decisions
• Mental Health Training license

Statement dc:rights

• Copyright 2025 Yue Bao

Language dc:language

en, eng

Handle dc:identifier

https://hdl.handle.net/2142/129622

OAI record oai:identifier

https://www.ideals.illinois.edu/oai-pmh?verb=GetRecord&metadataPrefix=etdms&identifier=oai%3Awww.ideals.illinois.edu%3A2142%2F129622