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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 Jan 2007
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01 Jan 2009
TL;DR: Overall, education delays family formation and increases participation in the labor force and women at the margin of college completion are those for whom the expansion of higher education exerts its greatest impact.
Abstract: Educational attainment is a significant predictor of women’s family formation patterns (Becker 1991; Rindfuss, Bumpass, and St. John 1980; Rindfuss, Morgan, and Offut 1996) and labor force participation (Bianchi 1995). Overall, education delays family formation and increases participation in the labor force. While highly educated women have postponed both marriage and parenthood in recent decades, less-educated women have postponed marriage more than parenthood. As a result, non-marital births have risen dramatically among less-educated women relative to highly educated women. Despite a substantial literature on the effects of education on family formation patterns among women, few studies evaluate potential heterogeneity in these effects. Women’s significantly increasing level of educational attainment (Buchman and DiPrete 2006) motivates renewed and careful attention to the impact of education on family formation patterns, particularly among college-educated women who have a low likelihood of college completion. Women at the margin of college completion are those for whom the expansion of higher education exerts its greatest impact.
1 citations
TL;DR: The authors empirically investigated the effects of wage bargaining in labor markets on the wage gap between foreign- and Canadian-educated workers and found that a significant part of the wage difference between Canadian and foreign-educated immigrants is not driven by the employers' risk aversion but by differences in human capital endowments and occupational matching quality.
Abstract: Abstract A growing wage gap between immigrant and native-born workers is well documented and is a fundamental policy issue in Canada. It is quite possible that wage differences, commonly attributed to the lower quality of foreign credentials or the deficiency in the accreditation of these credentials, merely reflect lower wage offers that immigrant workers receive due to risk aversion among local firms facing an elevated degree of asymmetric information. Using the 2006 and 2011 population censuses, this paper empirically investigates the effects of wage bargaining in labor markets on the wage gap between foreign- and Canadian-educated workers. Our results imply that a significant part of the wage gap between foreign-educated and Canadian-educated immigrant (and native-born) workers is not driven by the employers’ risk aversion but by differences in human capital endowments and occupational matching quality.
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TL;DR: This paper analyzed the presence of women in countries with different welfare models, examining the most relevant characteristics and the impact on the family and on household management, and found that female primary breadwinners tend to be older and more educated than their male partners, less religious, and more likely not to have children; they have more egalitarian values and a greater tendency to manage money separately.
Abstract: Advanced societies are characterized by a greater incorporation of women into the labor market, with women having increasingly higher levels of education and occupying more prominent positions. This trend has resulted in growing number of households in which women earn more than their male partners. This study analyzes the presence of these women in countries with different welfare models, examining the most relevant characteristics and the impact on the family and on household management. To fulfill these objectives, we used the latest wave of the International Social Survey Programme (ISSP) Family and Changing Gender Roles IV (2012). The characteristics studied were grouped into four dimensions: country of residence, sociodemographic characteristics, egalitarian values, and the management of intimacy. Our results indicate that female primary breadwinners tend to be older and more educated than their male partners, less religious, and more likely not to have children; they have more egalitarian values and a greater tendency to manage money separately.
1 citations