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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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01 Jul 2014
TL;DR: This article examined the trend over time of the rewards to education granted by the Mexican labor market accounting for gender differences and provided robust estimates of the returns to education across the conditional wage distribution using quantile regression methodology.
Abstract: The aim of this paper is to examine the trend over time of the rewards to education granted by the Mexican labor market accounting for gender differences. The paper provides robust estimates of the returns to education across the conditional wage distribution using quantile regression methodology. The estimated coefficients reveal a robust declining trend stronger for males than for females. The estimates of the returns to education are larger for females than for males, which may be explained by women’s acquisition of more schooling than males and their increasing participation in the labor market. Yet even as returns to education increase for women, the jobs they hold continue to pay lower wages relative to men.
2 citations
01 Jan 2019
TL;DR: In this paper, the potential consequences of education gaps in Romania in the frame of change in the last 25 years, a frame that includes European integration and the strategic goals set for Europe 2020, are discussed.
Abstract: This contribution discusses the potential consequences of education gaps in Romania in the frame of change in the last 25 years, a frame that includes European integration and the strategic goals set for Europe 2020. The theoretical background is mainly functional, conceiving that the education system is one of the core systems that provide the basis for a nation’s development. Using quantitative data from institutional sources, such as Eurostat and the UNESCO data bank, the present research identifies education gaps at several levels: between urban and rural areas, regions of development, social categories. The consequences of these gaps in the future will be dramatic because education outcomes have an impact on multiple sectors, such as employability, work force quality, quality of life in the long term, and the welfare of the entire society.
2 citations
TL;DR: The authors explored the relationship between childhood bullying and later earnings using the National Longitudinal Survey of Youth 1997 data and found that bullying in childhood increased significantly the probability of being bullied later, and that bullying was more prevalent among males than females.
Abstract: This paper contributes to a nascent economic literature on bullying. Using the National Longitudinal Survey of Youth 1997 data, I explored the relationship between childhood bullying and later earnings. Since males and females are usually subject to different kinds of bullying and coping strategies vary with age, I distinguished between pre-teen and teenage bullying by gender. After delineating the pathways by which being bullied could potentially lead to lower earnings, the analysis first considered the probability of being bullied either as a teenager or before the age of 12. Next, after a simple ordinary least squares analysis of a human capital earnings function, a detailed propensity score analysis with multiple matching schemes was undertaken separately for males and females, further subdivided by when bullying had occurred. Results indicated males bullied as teenagers had earnings 23% lower than their non-bullied counterparts. Females did not suffer this penalty, nor did children who were bullied only below the age of 12. However, being bullied in childhood increased significantly the probability of being bullied later. In terms of human capital formation and possible impact on later productivity, teen bullying may be affecting men the most. Current findings may also be useful in encouraging a targeted focus on those who may be in greater danger of being bullied. Children who have changed schools several times, males with a learning disability, or a vision, speech or hearing problem, and females with some kind of deformity would be targeted significantly more.
2 citations
Dissertation•
01 Jan 2017
2 citations
TL;DR: In this article, the determinants of wage growth velocity in personal formal sector of Bolgatanga Municipality were explored using Ordinary least square method to study the dependency of growth rate of wage on different variables.
Abstract: The primary aim of this study is to explore the determinants of wage growth velocity in personal formal sector of Bolgatanga Municipality. A primary data collection technique was used and sample size of 345 individuals interviewed using a well structured interview schedule and questionnaire by convenient sampling. Ordinary least square method was applied to study the dependency of growth rate of wage on different variables in Bolgatanga Municipality. Findings reveal that education, gender, experience, household area and marital status of the respondents absolutely affect growth of wages at less than 1% level of significance.
2 citations