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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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Dissertation•
14 Jan 2015
TL;DR: Gheasi et al. as mentioned in this paper studied the social economic impacts of international migration on Foreign Direct Investment (FDI), trade, tourism and labour markets, focusing on the role of the education of migrants.
Abstract: Masood Gheasi International migration has in recent years become a hot topic in both sending and receiving countries. Receiving countries are more concerned about the social economic impact of international immigration, while sending countries are concerned about the brain-drain effect. This dissertation focuses on the social economic impacts of international migration on Foreign Direct Investment (FDI), trade, tourism and labour markets. An important feature that distinguishes this study from previous migration studies is the focus on the role of the education (skills) of migrants. The empirical findings of the thesis demonstrate that a higher education level of migrants does not only generate push and pull effects in migration flows between OECD countries, but also complements the flows of FDI in both directions (inward and outward flows). Regarding international trade and tourism, this thesis shows that international migration has a positive effect on both international trade and Visiting Friends and Relatives (VFR) tourist flows. Moreover, this thesis also reveals that immigrants who are equally educated as the natives in the Netherlands are earning on average 3 per cent less than the natives graduates with the same qualification. This wage difference is further investigated in this thesis. We find that immigrants are often associated with lower schooling achievements, while secondgeneration immigrants (who are supposed to have a better language proficiency) are performing worse compared with first-generation immigrants. The relationship between quality of school and graduation score was found to be positive and significant.
15 citations
TL;DR: In this article, the authors examine whether, and how, the provision of pollution information through government websites helps to address environmental harm in the context of developing countries, and construct and test hypotheses about informational and socio-demographic factors that are likely to explain the effectiveness of Internet-aided emission violations control in urban communities as perceived by environmental regulators.
Abstract: While a growing body of literature suggests the regulatory potential of information and communication technologies for pollution abatement, empirical evidence on the subject remains limited. This research examines whether, and how, the provision of pollution information through government websites helps to address environmental harm in the context of developing countries. Drawing insights from the relevant literature, we construct and test hypotheses about informational and socio-demographic factors that are likely to explain the effectiveness of Internet-aided emission violations control in urban communities as perceived by environmental regulators. Findings from regression analysis indicate that decreases in emission violations as perceived by environmental field officials are: (1) attributable to the quality of municipal websites and local environmental activism; and (2) negatively related to population size. The research highlights the potential in municipalities' initiatives to utilise Internet techn...
14 citations
TL;DR: A novel view on education and health behavior of individuals constrained by aging bodies is presented, which rationalizes why better educated persons optimally choose a healthier lifestyle.
Abstract: This study presents a novel view on education and health behavior of individu- als constrained by aging bodies. The aging process, i.e. the accumulation of health decits over time, is built on recent insights from gerontology. The loss of body functionality, which eventually leads to death, can be accelerated by unhealthy behavior and delayed through health expenditure. The proposed theory rationalizes why better educated people optimally choose a healthier lifestyle, that is why they spend more on health and indulge less in unhealthy behavior. The model is calibrated for the average male US citizen. In the benchmark case a dierence of the return to education that motivates one year more of education motivates also about 8 percent less unhealthy behavior and 5 percent more health expenditure and thus explains half a year gain of longevity. Progress in medical technology explains why the education gradient gets larger over time.
14 citations
TL;DR: In this article, the authors investigate the determinants of wage growth rate in private formal sector of Division Bahawalpur and find that education, gender, experience, household locality and marital status of the respondents positively affect growth of wages at less than 1% level of significance.
Abstract: The focus of the study is to investigate the determinants of wage growth rate in private formal sector of Division Bahawalpur. A sample of 430 individuals is interviewed using a well structured interview schedule by convenient sampling. Ordinary least square method is applied to examine the dependency of growth rate of wage on different variables. Findings reveal that education, gender, experience, household locality and marital status of the respondents positively affect growth of wages at less than 1% level of significance.
14 citations
DOI•
01 Jan 2012
TL;DR: In this paper, the authors argue that education has a positive effect on employability in Ghana and that the highest private returns on education, in terms of employability, are tertiary education.
Abstract: The relevance of education for both individual and social development in Ghana and in many developing societies is generally acknowledged. Human capital theorists identify positive effects of education on labour market outcomes of individuals. It has been argued that education enhances the skills and knowledge of individuals for better employment, higher productivity and improved wages. This paper draws on the latest and most comprehensive survey data in Ghana, the fifth round of the Ghana Living Standards Survey (GLSS 5), to assess the effects of education on employability in Ghana. This paper argues that education has a positive effect on employability in Ghana. Analysis of the GLSS 5 data shows that in the Ghanaian labour market, individuals who have attained basic, secondary and tertiary education have higher probabilities of being employed than those with no education, ceteris paribus. However, the highest private returns on education, in terms of employability is tertiary education. Hence optimal post primary education investment in Ghana is one with a high possibility for tertiary education.
14 citations