Posted Content•
The causal effect of education on earnings
TL;DR: This paper surveys the recent literature on the causal relationship between education and earnings and concludes that the average (or average marginal) return to education is not much below the estimate that emerges from a standard human capital earnings function fit by OLS.
Abstract: This paper surveys the recent literature on the causal relationship between education and earnings. I focus on four areas of work: theoretical and econometric advances in modelling the causal effect of education in the presence of heterogeneous returns to schooling; recent studies that use institutional aspects of the education system to form instrumental variables estimates of the return to schooling; recent studies of the earnings and schooling of twins; and recent attempts to explicitly model sources of heterogeneity in the returns to education. Consistent with earlier surveys of the literature, I conclude that the average (or average marginal) return to education is not much below the estimate that emerges from a standard human capital earnings function fit by OLS. Evidence from the latest studies of identical twins suggests a small upward "ability" bias -- on the order of 10%. A consistent finding among studies using instrumental variables based on institutional changes in the education system is that the estimated returns to schooling are 20-40% above the corresponding OLS estimates. Part of the explanation for this finding may be that marginal returns to schooling for certain subgroups -- particularly relatively disadvantaged groups with low education outcomes -- are higher than the average marginal returns to education in the population as a whole.
Citations
More filters
Posted Content•
TL;DR: In this paper, an index of discrimination disaggregated by years of schooling is constructed using Oaxaca decompositions, and it was found that the index is negatively correlated with schooling and it accounts for about one half of the differential in the male and female schooling coefficients.
Abstract: The rate of return to schooling appears to be nearly two percentage points greater for females than for males in the National Longitudinal Survey of Youth data set, despite the fact that females tend to earn less, both absolutely and controlling for personal characteristics A survey of previous studies reporting wage equations reveals that a higher return to female schooling appears to be the norm, although it has not attracted comment This paper considers various explanations The most important involves the detrimental impact of discrimination and other factors that cause women to accept wage offers that undervalue their characteristics It is hypothesized that the better educated is a woman, the more able and willing she is to overcome the se handicaps and compete with men in the labour market, and an index of discrimination disaggregated by years of schooling is constructed using Oaxaca decompositions This index is indeed negatively correlated with schooling and it accounts for about one half of the differential in the male and female schooling coefficients Next considered is the possibility that part of the differential could be attributable to male-female differences in the quality of educational attainment, as proxied by their academic outcomes in high school The NLSY females did indeed perform better than the males, but there is little association between academic attainment and Earnings and allowing for it made no difference to the estimate of the differential in the returns to schooling The third explanation considered is that women choose to work in sectors where education is relatively highly valued Controlling for this effect does indeed account for much of the remaining differential
32 citations
TL;DR: In this paper, the authors examined the remuneration of non-executive directors, examining individual monitoring characteristics and director capital in addition to firm characteristics using a large sample of FTSE All-Share non executive directors from 2001 to 2012.
Abstract: This study examines the remuneration of non-executive directors, examining individual monitoring characteristics and director capital in addition to firm characteristics Using a large sample of FTSE All-Share non-executive directors from 2001 to 2012, we find that remuneration is positively linked to both directors' individual characteristics and firm characteristics We find that director age, tenure, and network size are positively related to remuneration, suggesting that directors' ability to contribute to board decision-making and their set of resources are valued by firms We find that director remuneration is negatively related to monitoring characteristics such as director independence, suggesting possible agency considerations, as effective monitors of top management are paid less However, director ownership has a non-linear relationship with remuneration, and is substitutive at higher levels of ownership We also observe that UK boards are relatively homogeneous, with few female directors and even fewer Chairmen, and find strong evidence of a gender gap in remuneration when examining inter- and intra-firm variations Our findings have implications for regulators who seek to intervene in board appointments, as they indicate that firms do not necessarily value or reward resources brought by female or independent directors
32 citations
01 Jan 2006
31 citations
TL;DR: The authors found that body weight is negatively related to female academic achievement and that psychological wellbeing accounts for up to 30% of the relationship between self-esteem and depression in female adolescents, but not male adolescents.
Abstract: Although obese students are more likely to exhibit the symptoms of depression than their slimmer counterparts and often do poorly in school, it is not clear whether these associations are spurious or causal in nature. Drawing on data from the National Longitudinal Study of Adolescent Health, we use an instrumental variables (IV) approach to distinguish between these hypotheses. IV estimates suggest that body weight leads to decreased self-esteem and increased depressive symptomatology among female, but not male, respondents. In addition, we find that body weight is negatively related to female academic achievement. Finally, we explore the degree to which the relationship between body weight and female academic achievement is explained by psychological wellbeing. We find that psychological wellbeing accounts for up to 30 % of this relationship.
31 citations
TL;DR: In this article, a 15-year natural experiment of the expansion of higher education in the Russian Federation is presented, where the authors analyze the e ects of an educational system expansion on labor market outcomes.
31 citations