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 2002
TL;DR: A traves de modelos probit ordenados reveal that the education formal influye positivamente in el grado de satisfaccion de los trabajadores con su empleo, incluso cuando se controla el efecto de las condiciones objetivas que determinan el estatus in el mercado laboral as mentioned in this paper.
Abstract: El analisis a traves de modelos probit ordenados revela que la educacion formal influye positivamente en el grado de satisfaccion de los trabajadores con su empleo, incluso cuando se controla el efecto de las condiciones objetivas que determinan el estatus en el mercado laboral. Por el contrario la educacion no tiene efecto significativo sobre la satisfaccion con la cantidad de tiempo libre, la cual depende exclusivamente de las caracteristicas personales del trabajador y de su situacion efectiva en el mercado de trabajo.
Palabras clave: trabajo, educacion, satisfaccion en el trabajo, ocio
Posted Content•
01 Jan 2013
TL;DR: In this paper, the authors present the theoretical framework of the so-called Mincerian equations used for modelling returns to education and construct a conceptual framework which allows them to answer the question "What happens to doctoral degree holders in the labour market?" They analyse data for about 45,000 PhD graduates in Bulgaria from the NSI survey Career development of PhD degree holders run in 2007, 2009, and 2010.
Abstract: In this study we present the theoretical framework of the so called Mincerian equations used for modelling returns to education Then, we construct a conceptual framework which allows us to answer the question “What happens to doctoral degree holders in the labour market?” We analyse data for about 45,000 PhD graduates in Bulgaria from the NSI survey Career development of PhD degree holders run in 2007, 2009, and 2010 An attempt is made to measure pay gaps in terms of gender and major of study Using Mincerian equations, we calculate these pay gaps, and thus we answer the question whether there are any income differences among doctoral degree holders We find out that a doctoral degree holder in natural or technical science has a significantly higher return than a degree holder in social or humanitarian studies Another finding is that the greatest gender pay gaps are observed in social and humanitarian studies while the smallest gap is in natural and technical sciences
01 Jan 2003
TL;DR: This article examined the empirical importance of accounting for heterogeneity (and selection) in the estimation of the returns to schooling and in the evaluation of education policy and found that heterogeneity in returns is an empirically relevant phenomenon.
Abstract: In this paper I examine the empirical importance of accounting for heterogeneity (and selection) in the estimation of the returns to schooling and in the evaluation of education policy. I study white males and females in the National Longitudinal Survey of Youth and High School and Beyond, and white males in the Panel Study of Income Dynamics. I find that, across datasets, heterogeneity (and selection) in returns is an empirically relevant phenomenon. The return to schooling for the average student in college is systematically above the return to schooling for the average individual indifferent between going to college or not (marginal individual). It is also generally above the return for individuals induced to go to college by different tuition subsidies.
Posted Content•
TL;DR: This paper found that for both men and women with less than a high school degree, the median DI participation rate is 6.6 times the participation rate for those with a college degree or more.
Abstract: The goal of this paper is to draw attention to the long lasting effect of education on economic outcomes. We use the relationship between education and two routes to early retirement – the receipt of Social Security Disability Insurance (DI) and the early claiming of Social Security retirement benefits – to illustrate the long-lasting influence of education. We find that for both men and women with less than a high school degree the median DI participation rate is 6.6 times the participation rate for those with a college degree or more. Similarly, men and women with less than a high school education are over 25 percentage points more likely to claim Social Security benefits early than those with a college degree or more. We focus on four critical “pathways” through which education may indirectly influence early retirement – health, employment, earnings, and the accumulation of assets. We find that for women health is the dominant pathway through which education influences DI participation. For men, the health, earnings, and wealth pathways are of roughly equal magnitude. For both men and women the principal channel through which education influences early Social Security claiming decisions is the earnings pathway. We also consider the direct effect of education that does not operate through these pathways. The direct effect of education is much greater for early claiming of Social Security benefits than for DI participation, accounting for 72 percent of the effect of education for men and 67 percent for women. For women the direct effect of education on DI participation is not statistically significant, suggesting that the total effect may be through the four pathways.