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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.
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TL;DR: In this paper, the authors estimate the cost of the Vietnam draft by applying hedonic methods to the decision to attend college and the decision not to enlist in the military, in 2009 dollars.
Abstract: This study estimates the cost of the Vietnam draft by applying hedonic methods to the decision to attend college and the decision to voluntarily enlist. In 2009 dollars, the estimated cost of the draft is roughly 12 million.
21 citations
TL;DR: The results reveal a positive pattern of selection on education for asylum seekers who were able to flee Iraq and Syria, and the selection is neutral for individuals seeking asylum from Afghanistan and negative for Asylum seekers from Albania and Serbia.
Abstract: I examine the pattern of selection on education of asylum seekers recently arrived in Germany from five key source countries: Afghanistan, Albania, Iraq, Serbia, and Syria. The analysis relies on original individual-level data collected in Germany combined with surveys conducted at origin. The results reveal a positive pattern of selection on education for asylum seekers who were able to flee Iraq and Syria, and the selection is neutral for individuals seeking asylum from Afghanistan and negative for asylum seekers from Albania and Serbia. I provide an interpretation of these patterns based on differences in the expected length of stay at destination, the migration costs faced by asylum seekers to reach Germany, and the size of migration networks at destination.
21 citations
01 Jan 2004
TL;DR: In this paper, the authors focus on the sustainable growth of firms and Japanese economy, and consider the economic welfare of stakeholder society, and especially put an attention to the sustainable and sustainable growth.
Abstract: Productivity growth has been slow in Japan over the last decade, especially in comparison with the United States. It has been argued that the lack of product market competition and poor corporate governance are two of the main reasons for this phenomenon. Internal monitoring works well under the adequate corporate governance, where the incentives for management efficiency are given, and thus prevent the dogmatic decision making of inside stakeholders. Japan’s main bank and financial keiretsu systems were quite prevalent as components of Japanese type of corporate governance. The webs of equity cross-holdings among main bank and keiretsu firms make Japanese banks influential in the governance. This governance system worked well before the Bubble economy, but it has not been working well after the collapse of the bubble economy. Establishing the adequate corporate governance system is the necessary condition to enable the sustainable growth of firms and Japanese economy. New corporate governance is needed in Japan. This paper especially puts an attention to the sustainable growth of firms and Japanese economy, and considers the economic welfare of stakeholder society. Section 2 clarifies the characteristics of Japanese type of corporate governance. Section 3 reviews the preceding researches on corporate governance. In Section 4, we explain our datasets. We present our models in Section 5, and discuss our empirical results on Section 6. Section 7 concludes.
21 citations
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TL;DR: In this paper, the authors examined the relationship between the productivity of workers specifically engaged in innovation and firm size in the pharmaceutical and semiconductor industries and found that inventors' productivity increases with firm size.
Abstract: It has long been recognized that worker wages and possibly productivity are higher in large firms. Moreover, at least since Schumpeter (1942) economists have been interested in the relative efficiency of large firms in the research and development enterprise. This paper uses longitudinal worker-firm-matched data to examine the relationship between the productivity of workers specifically engaged in innovation and firm size in the pharmaceutical and semiconductor industries. In both industries, we find that inventors' productivity increases with firm size. This result holds across different specifications and even after controlling for inventors' experience, education, the quality of other inventors in the firm, and other firm characteristics. We find evidence in the pharmaceutical industry that this is partly accounted for by differences between how large and small firms organize R&D activities.
21 citations