Posted Content•
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.
Citations
More filters
01 Jan 2013
TL;DR: In this article, the determinants of school departure after compulsory secondary education are studied and it is shown that students' inter-temporal preferences as well as the quality of the information received by students, regarding their alternatives after completing compulsory education, explain their decisions.
Abstract: In this paper we study the determinants of school d
ropout after compulsory secondary
education. We explore how students� perceptions and
preferences (subjective variables) affect
students� decisions. We analyze data collected dire
ctly from students when they had to take a
decision concerning their education in their last y
ear of compulsory education (at the age of 16).
Our results confirm those obtained by other authors
in Spain, that is, family background and
labor market conditions affect students� decisions.
However, we go one step further and we
show that students� inter-temporal preferences as w
ell as the quality of the information received
by students, regarding their alternatives after com
pleting compulsory education, explain
students� decisions. Additionally, we find signific
ant differences among students depending on
the type of school they attend (public
versus
private schools)
Dissertation•
01 Jan 2015
01 Jan 2012
TL;DR: This article found that academic education is associated with higher returns to work experience, supporting the idea that academic schooling augments learning ability more than vocational training, and academic education was also associated with shorter non-work spells (e.g. unemployment) and more frequent occupational changes, suggesting general study imparts greater labor market flexibility.
Abstract: This paper documents several differences between vocational and academic education with respect to labor market outcomes, focusing on twoyear and shorter post-secondary programs. It is hypothesized that these differential outcomes arise because the educational pathways differ both in degree of specialization as well as in their effects on learning ability. Using the National Longitudinal Survey of Youth 1997, I test several implications of this theory. I find that academic education is associated with higher returns to work experience, supporting the idea that academic schooling augments learning ability more than vocational training. Academic education is also associated with shorter nonwork spells (e.g. unemployment) and more frequent occupational changes, suggesting general study imparts greater labor market flexibility. On the other hand, the data shows a substantially higher wage return to vocational education.
01 Jan 2011
TL;DR: This article investigated the connection between education and wage inequality in nine European countries and found that the amount of conditional wage dispersion within education groups is substantially higher and has grown faster among college-educated workers than among less educated workers.
Abstract: In this paper we investigate the connection between education and wage inequality in nine European countries. We exploit the quantile regression technique to calculate returns to lower secondary, upper secondary and tertiary education at different points of the wage distribution. Using data from the last few decades, we describe changes in the conditional wage distribution of the surveyed countries. We find that in most European countries the amount of conditional wage dispersion within education groups is substantially higher and has grown faster among college-educated workers than among less educated workers.
TL;DR: In this article, the authors analyse the major trends in higher education funding in Europe and underline to what extent the current debates about higher education and its funding have been significantly influenced by economic considerations.
Abstract: . Higher education institutions face today a demanding and complex context in which they are asked to fulfill multiple roles. Many of these challenges have to be faced in a complex financial context in which traditional modes of funding have been transformed and public sources are not as generous as they often were in the past.Like in many other public services, in recent years it became a rather common statement that higher education institutions should be more efficient in the use of taxpayers’ resources, which had a clear impact in visible changes in the funding of public higher education in Europe. In this paper we will analyse the major trends in higher education funding in Europe and underline to what extent the current debates about higher education and its funding have been significantly influenced by economic considerations. We will identify some of the main issues that dominate the current debate around higher education’s funding, drawing some comparative insights from developments across Europe. Resumen. Las instituciones de Ensenanza Superior estan involucradas en un contexto complejo y exigente en el que tienen que hacer frente a multiples demandas. Muchas de estas demandas emergen en un entorno financiero dificil, las fuentes tradicionales de financiamiento se han trasformado y los fondos publicos no fluyen con la generosidad de antes. Como en muchas areas del sector publico, las instituciones de ensenanza superior estan presionadas para tener un uso mas eficiente de las subvenciones publicas. Ello se observa como preocupacion en los modos de financiamiento de muchos sistemas publicos de Ensenanza Superior en Europa. En este articulo se analizan algunas de las principales tendencias en el financiamiento de Educacion Superior publica en Europa subrayando la influencia creciente de los razonamientos economicos en estos sistemas. En el analisis, y a partir de la comparacion de algunos casos, seidentificaran algunos de los temas clave en el debate actual sobre el financiamientode la Educacion Superior en ese continente.