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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 2009
TL;DR: In this paper, a metodo de estimación de maxima verosimilitud, mediante the utilizacion of un logit ordenado, empleando el modulo especial de 2007 de the Encuesta de Condiciones de Vida de EUROSTAT dedicado a the transmision intergeneracional de la pobreza.
Abstract: El principal objetivo del trabajo es determinar el grado de influencia de los diferentes factores individuales y del entorno, familiar y social, en la capacidad de los individuos para alcanzar o no ciertos objetivos educativos, teniendo en cuenta los efectos posteriores de aquellos en relacion con su insercion en el mercado de trabajo, su nivel salarial y su productividad (Card, 1999).
Para ello, se ha aplicado un metodo de estimacion de maxima verosimilitud, mediante la utilizacion de un logit ordenado, empleando el modulo especial de 2007 de la Encuesta de Condiciones de Vida de EUROSTAT dedicado a la transmision intergeneracional de la pobreza. Esta base de datos cuenta con valiosa informacion acerca del individuo y la situacion personal y familiar de este cuando tenia entre 12 y 16 anos, resultando representativa para las Comunidades Autonomas espanolas y para la poblacion inmigrante.
Los resultados obtenidos, que van en la linea de la literatura empirica analizada; indican la relevancia del genero, del estado de salud y del lugar de nacimiento, en cuanto a las variables referidas directamente al individuo y, en relacion al resto de las variables utilizadas; destaca la importancia de la educacion y el tipo de ocupacion de los padres, de la estructura familiar y de la situacion financiera existente en el momento en que el individuo se estaba educando.
TL;DR: In this article, the effects of educational programs on wages, annual time allocations, and poverty of male and female farmworkers and their families using regression analysis in comparison to propensity score matching were investigated.
Abstract: Job training and employment assistance programs aim to assist migrant and seasonal farmworkers and their dependents locate steady employment and develop job skills. This study investigates effects of educational programs on wages, annual time allocations, and poverty of male and female farmworkers and their families using regression analysis in comparison to propensity score matching. Continuing education participation is found to be associated with higher wages, though variation across program types is large and magnitudes across genders matter. Program participation is positively related to work weeks, and negatively related to weeks abroad and to poverty incidence.
01 Jul 2018
TL;DR: In this paper, the authors examined how type of diagnosis, educational trajectories and educational qualifications affect the employment prospects of young adults with mental disorders and found that individuals with mental disorder that typically have an onset in early childhood, those who experience educational trajectory including special needs education, and those attaining higher levels of qualification are more likely to be employed in early adulthood.
Abstract: Abstract We examine how type of diagnosis, educational trajectories and educational qualifications affect the employment prospects of young adults with mental disorders. We draw on a novel dataset based on data from the Swiss Federal Social Insurance Office. Our analysis shows that individuals with mental disorders that typically have an onset in early childhood, those who experience educational trajectories including special needs education, and those attaining higher levels of qualification are more likely to be employed in early adulthood.
01 Jan 2013
TL;DR: In this article, a total sample of 1,117 employees in Southern Peninsular Malaysia covering the states of Johor, Malacca and Negeri Sembilan were collected in a 2011/2012 survey to test this phenomenon.
Abstract: Excessive educational investment not only will lead to an increase in the number of educated unemployed but also will create occupational mismatch as a result of being employed in occupations where the level of education is lower than their own education level. This phenomenon can create educational inflation if the net rate of return to education is negative. A total sample of 1,117 employees in Southern Peninsular Malaysia covering the states of Johor, Malacca and Negeri Sembilan were collected in a 2011/2012 survey to test this phenomenon. The results show there is indeed a phenomenon of occupational mismatch in the labour market. The estimated results on this phenomenon based on modified income model of Mincer (1974) show that the rate of return to education has declined and being negative, which could translate into a potential of educational inflation.
01 Jan 2015
TL;DR: In this article, the authors investigated the degree to which work-related training affects the location, scale and shape of the conditional wage distribution using quantile regression (QR) approach.
Abstract: Human capital theory postulates that human capital investment has positive impact on wages. Training as one of the human capital components is important for providing the workforce with the necessary skills, enhancing workers skills and productivity and hence raising their wages. The objective of this paper is to investigate the degree to which workrelated training affect the location, scale and shape of the conditional wage distribution using quantile regression (QR) approach. Using data from the Workers’ Competitiveness Survey conducted in the year 2007/2008, we utilize both ordinary least squares (OLS) and QR regression techniques to estimate associations between work-related training and wages for selected services subsectors in Malaysia. The results show that the association between number of training attended and wages are dissimilar across the five quantiles. The training affects not only the location but the scale and the shape of the conditional wages distribution. We also observe positive and significant training effects as well as symmetrical-sloping profiles across quantiles of the conditional wages distribution.