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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 determinants of pay for entry-level jobs among Japanese firms were studied and compared with company size, performance, industry, and foreign ownership data from Toyo Keizai's Japan Company Handbook.
Abstract: This is the first empirical study of the determinants of pay for entry-level jobs among Japanese firms. Pay data of 1,382 companies obtained from the Nikkei survey was matched with company size, performance, industry, and foreign ownership data from Toyo Keizai's Japan Company Handbook. I found that unlike the results based on U.S. data, company size is not related to entry-level pay. Firm performance is positively related, but its effect is minimal. Industry membership and foreign ownership are related. I believe that these findings highlight the influence of the Japanese employment context and information sharing in Japan. Implications for research and practice are discussed.
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TL;DR: In this article, the authors examined the impact of human capital variables, household factors, job-related factors, individual characteristics and locational factors on the earnings of an individual, and found that human capital factors impact the earnings positively for both regular and casual workers.
Abstract: The central idea of the present study is to re-establish the importance of human capital variables (education and experience) at all India level and also at the disaggregated level of gender (male/female) across regular and casual workers using NSS 68th round. This is the latest employment–unemployment unit-level records pertaining to year 2011–2012. The paper examines the impact of human capital variables, household factors, job-related factors, individual characteristics and locational factors on earnings of an individual. Separate augmented Mincerian equations have been used for regular and casual workers, further subdivided at the level of male and female. The method of quantile regression has been used to estimate the augmented Mincerian equation at the above-mentioned disaggregated levels. The present study showcases that human capital variables, household factors, job-related factors, individual characteristics and locational factors impact regular and casual workers differently, the variation being further pronounced when disaggregated at the level of gender. Interestingly, human capital variables impact the earnings of regular workers (male and female) and casual (male and female) workers positively. Factoring the growing informalisation (not being entitled to social security benefits) in the regular form of employment, the study showcases a wide disparity within the regular workers. Thus, an attempt has been made to unfold primarily the interplay between education and earnings at various disaggregated levels.
8 citations
TL;DR: In this article, the authors investigate the effect of English language proficiency on the wages of full-time employees in Poland using a unique data set with information on over 600,000 survey respondents polled over the five-year period from 2013 to 2017.
Abstract: We investigate the effect of English language proficiency on the wages of native full-time employees in Poland. Using a unique data set with information on over 600,000 survey respondents polled over the five-year period from 2013 to 2017, we employ an IV approach founded on a natural experiment - namely, the reform of foreign language instruction in Polish schools. Our preferred estimates indicate that monthly wages for those individuals with ‘good’ or ‘very good’ knowledge of English exceeded the wages of those with ‘no English’ (or those with just a conversational proficiency) by nearly 60% for men and more than 50% for women. The estimates are statistically significant for both genders, and suggest quantitatively relevant wage returns for proficiency in English.
8 citations
TL;DR: Jiang et al. as mentioned in this paper analyzed the effects of increases in federal student loan caps using detailed student-level financial data and found a pass-through effect on tuition of changes in subsidized loan maximums of about 60 cents on the dollar.
Abstract: We study the link between the student credit expansion of the past 15 years and the contemporaneous rise in college tuition. To disentangle simultaneity issues, we analyze the effects of increases in federal student loan caps using detailed student-level financial data. We find a pass-through effect on tuition of changes in subsidized loan maximums of about 60 cents on the dollar and of about 20 cents on the dollar for unsubsidized federal loans. The effect is most pronounced for more expensive degrees and degrees offered by for-profit and 2-year institutions. Received February 23, 2017; editorial decision March 8, 2018 by Editor Wei Jiang. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.
8 citations
14 Dec 2012
TL;DR: In this paper, the impact of asistir a un establecimiento de educacion media tecnico profesional (TP) sobre el desempeno en el mercado laboral was analyzed.
Abstract: Este trabajo analiza el impacto de asistir a un establecimiento de educacion media tecnico profesional (TP) sobre el desempeno en el mercado laboral. Utilizando datos administrativos de salarios y la informacion contenida en la prueba SIMCE, identificamos el tipo de colegio en que los individuos cursaron sus estudios secundarios (2001) y luego observamos los meses de empleo formal (asalariado) y salarios para el periodo 2007-2011..
8 citations