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Gordon B Dahl - One of the best experts on this subject based on the ideXlab platform.
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mobility and the Return to Education testing a roy model with multiple markets
Econometrica, 2002Co-Authors: Gordon B DahlAbstract:Self-selected migration presents one potential explanation for why observed Returns to a college Education in local labor markets vary widely even though U.S. workers are highly mobile. to assess the impact of self-selection on estimated Returns, this paper first develops a Roy model of mobility and earnings where workers choose in which of the 50 states (plus the District of Columbia) to live and work. Available estimation methods are either infeasible for a selection model with so many alternatives or place potentially severe restrictions on earnings and the selection process. This paper develops an alternative econometric methodology that combines Lee's (1983) parametric maximum order statistic approach to reduce the dimensionality of the error terms with more recent work on semiparametric estimation of selection models (e.g., Ahn and Powell (1993)). The resulting semiparametric correction is easy to implement and can be adapted to a variety of other polychotomous choice problems. The empirical work, which uses 1990 U.S. Census data, confirms the role of comparative advantage in mobility decisions. The results suggest that self-selection of higher educated individuals to states with higher Returns to Education generally leads to "upward" biases in OLS estimates of the Returns to Education in state-specific labor markets. While the estimated Returns to a college Education are significantly biased, correcting for the bias does not narrow the range of Returns across states. Consistent with the finding that the corrected Return to a college Education differs across the U.S., the relative state-to-state migration flows of college- versus high school-educated individuals respond strongly to differences in the Return to Education and amenities across states. Copyright The Econometric Society 2002.
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MOBILITY AND THE Return to Education: TESTING A ROY MODEL WITH MULTIPLE MARKETS
Econometrica, 2002Co-Authors: Gordon B DahlAbstract:Self-selected migration presents one potential explanation for why observed Returns to a college Education in local labor markets vary widely even though U.S. workers are highly mobile. to assess the impact of self-selection on estimated Returns, this paper first develops a Roy model of mobility and earnings where workers choose in which of the 50 states (plus the District of Columbia) to live and work. Available estimation methods are either infeasible for a selection model with so many alternatives or place potentially severe restrictions on earnings and the selection process. This paper develops an alternative econometric methodology that combines Lee's (1983) parametric maximum order statistic approach to reduce the dimensionality of the error terms with more recent work on semiparametric estimation of selection models (e.g., Ahn and Powell (1993)). The resulting semiparametric correction is easy to implement and can be adapted to a variety of other polychotomous choice problems. The empirical work, which uses 1990 U.S. Census data, confirms the role of comparative advantage in mobility decisions. The results suggest that self-selection of higher educated individuals to states with higher Returns to Education generally leads to upward biases in OLS estimates of the Returns to Education in state-specific labor markets. While the estimated Returns to a college Education are significantly biased, correcting for the bias does not narrow the range of Returns across states. Consistent with the finding that the corrected Return to a college Education differs across the U.S., the relative state-to-state migration flows of college- versus high school-educated individuals respond strongly to differences in the Return to Education and amenities across states.
Hui Ren Tan - One of the best experts on this subject based on the ideXlab platform.
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The Return to Education in the Mid-20th Century: Evidence from Twins
The Journal of Economic History, 2020Co-Authors: James J. Feigenbaum, Hui Ren TanAbstract:What was the Return to Education in the United States at mid-century? In 1940, the correlation between years of schooling and earnings was relatively low. In this article, we estimate the causal Return to schooling in 1940, constructing a large linked sample of twin brothers to account for differences in unobserved ability and family background. We find that each additional year of schooling increased labor earnings by approximately 4 percent, about half the Return found for more recent cohorts in twins studies. These Returns were evident both within and across occupations and were higher for sons from lower socio-economic status families.
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the Return to Education in the mid 20th century evidence from twins
Social Science Research Network, 2019Co-Authors: James Feigenbaum, Hui Ren TanAbstract:What was the Return to Education in the United States at mid-century? In 1940, the correlation between years of schooling and earnings was relatively low, less than it had been in 1915 or than it would be in later decades. In this paper, we estimate the causal Return to schooling in 1940, constructing a large linked sample of twin brothers to account for differences in unobserved ability and family background. Though imperfect, the twins identification strategy allows us to compare the Return to Education to recent studies implemented similarly. We find that the Return to Education was relatively low in 1940, with each additional year of schooling increasing labor earnings by approximately 4%. Returns to Education were evident both within and across occupations and were higher for sons born to lower SES families. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
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The Return to Education in the Mid-20th Century: Evidence from Twins
National Bureau of Economic Research, 2019Co-Authors: James J. Feigenbaum, Hui Ren TanAbstract:What was the Return to Education in the United States at mid-century? In 1940, the correlation between years of schooling and earnings was relatively low, less than it had been in 1915 or than it would be in later decades. In this paper, we estimate the causal Return to schooling in 1940, constructing a large linked sample of twin brothers to account for differences in unobserved ability and family background. Though imperfect, the twins identification strategy allows us to compare the Return to Education to recent studies implemented similarly. We find that the Return to Education was relatively low in 1940, with each additional year of schooling increasing labor earnings by approximately 4%. Returns to Education were evident both within and across occupations and were higher for sons born to lower SES families.
Lorenzo Fjigatalamanca - One of the best experts on this subject based on the ideXlab platform.
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private and social rates of Return to Education of academicians note
The American Economic Review, 2016Co-Authors: Lorenzo FjigatalamancaAbstract:In a recent article in this Review bDuncan Bailey and Charles Schotta, there are two specification errors that, I believe, can invalidate their policy conclusions. The first, conmmloin to the miajority of papers on humnl.an capital, is that rates of Return on edtucation cannot be nmeasured by wage differentials. The second is that Bailey and Schotta failed to take into accotunt the peculiar position of universities in the market for academicians. As shown in Table 1 of their paper, the universities enjoy a nearly monopsonistic position in the nmarket for Ph.I). recipients. Therefore a tradeoff will result between high salaries and no subsidies to graduate Education on one side, and low salaries and subsidies to graduate Education on the other side. As for the first point, it is by now a commonplace in economic literature, that the social marginal product cannot be imieasured through wages. For instance Joan Robinson, rn 175 * T in her 1971 Richard T. Ely lecture says:
Joseph G Altonji - One of the best experts on this subject based on the ideXlab platform.
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the effects of family characteristics on the Return to Education
The Review of Economics and Statistics, 1996Co-Authors: Joseph G Altonji, Thomas A DunnAbstract:In this paper, the authors examine the role of parental Education in the human capital production function by estimating the effects of parental Education on the Education profile of wages. The analysis uses sibling pairs from the Panel Study of Income Dynamics and the National Longitudinal Surveys of Labor Market Experience of Young Men and Young Women. The authors obtained mixed evidence on whether parental Education raises the Return to Education. Copyright 1996 by MIT Press.
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Heterogeneity in Schooling, Uncertainty, and the Return to Education
1996Co-Authors: Joseph G AltonjiAbstract:There is an enormous empirical literature on human capital and earnings that has grown out of work by Jacob Mincer, Gary Becker, and other pioneers. Much of the research focuses on measuring the value of a year spent in school.(1) But in recent years, the research has begun to explore more fully the implications of the fact that schooling is heterogenous, both in quality and in subject matter, and that people make decisions about schooling without complete knowledge of their tastes and talents for different types of work. This article briefly summarizes three avenues that I have been pursuing: First, what are the implications of the fact that Education is a sequential choice made under uncertainty? Second, can we get inside the black box of years-spent-in-school by examining the effects of actual courses taken on the payoff to school? And third, I use a new methodology to revisit an old and controversial question - do school inputs affect outcomes? The Demand for and Return to Education When Education Outcomes Are Uncertain The standard human capital model of schooling assumes that individuals are able to choose a future level of Education with no uncertainty about actually completing that level. It also focuses on the number of years of school chosen, rather than on the specific major. In contrast, I model the demand for Education as a sequence of choices made under uncertainty. I then examine how variables that influence tastes for school, ability to do college work, and the payoffs to particular college programs affect the expected Return to a year of school.(2) Three facts suggest that uncertainty is important, and they motivate this research. First, many individuals who plan to complete college instead drop out. Second, for some demographic groups the ex post Returns to Education are associated largely with completing high school or completing college. Such nonlinearities in the ex post Returns, or a gap between the effect of Education on wages and the borrowing rate, may produce substantial differences between ex ante and ex post Returns to the first year or two of college. The Return to the first year of college is not the earnings differential between individuals with 12 and 13 years of schooling. Rather, the Return is the difference between the earnings of the person who stops at 12 years of Education and the expected earnings net-of-Education-costs of a person who attends the first year of college. Expected earnings depend on the earnings associated with 14, 15, 16, or more years of Education. Expected earnings also depend on the probabilities of the various Education outcomes for an individual who has completed year 13. Family background, aptitude, and other factors that affect the odds that an individual actually will complete the program may influence the expected Return to starting college. Third, there are large differences across fields of specialization in the earnings differential between graduates of college and high school. Individuals who do not know if they will be able to, but want to, complete a program in a particular field must consider the alternative options that result from starting that particular program. A theoretical analysis and empirical investigation show that personal characteristics affect the ex ante rate of Return to starting college, in part by altering the market payoffs to completing particular postsecondary programs of study, and in part by altering the completion probabilities. There are a number of specific empirical findings. First, the ex ante Return to starting college for male high school graduates is higher than the ex post Return to the first year of college because starting college provides the option to continue. Second, gender differences in the probability of completing a high-paying major tend to raise the Return to college for men relative to women. Third, aptitude raises the ex ante Return to starting college. Aptitude raises the Return for men both by increasing the ex post payoffs to college and by favorably altering the probabilities of the various Education outcomes conditional on starting college. …
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The Effects of School and Family Characteristics on the Return to Education
1995Co-Authors: Joseph G Altonji, Thomas A DunnAbstract:We measure the effects of parental Education on the Education profile of wages. The analysis uses sibling pairs from the Panel Study of Income Dynamics and the National Longitudinal Surveys of Labor Market Experience of Young Men and Young Women. We also use the variance across siblings in school characteristics to estimate the effects of school inputs on wages holding family background constant. We obtained mixed evidence on whether parental Education raises the Return to Education. We find that teacher's salary, expenditures per pupil, and a composite index of school quality measures have a substantial positive effect on the wages of high school graduates.
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the demand for and Return to Education when Education outcomes are uncertain
Journal of Labor Economics, 1993Co-Authors: Joseph G AltonjiAbstract:This article treats Education as a sequential choice that is made under uncertainty. A simple model is used to explore the effects of ability, high school preparation, preferences for schooling, the borrowing rate, and ex post payoffs to college on the probability of various post-secondary college outcomes and the ex ante Return to starting college. The model motivates an empirical method of accounting for uncertainty about Educational outcomes and for nonlinearity in the relationship between years of Education and earnings when estimating the expected Return to the first year of college.
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the demand for and Return to Education when Education outcomes are uncertain
Research Papers in Economics, 1991Co-Authors: Joseph G AltonjiAbstract:The vast literature on human capital and earnings assumes that individuals know in advance that they will complete a particular program of schooling. This paper treats Education as a sequential choice that is made under uncertainty. A simple two period structural model is used to explore the effects of ability, high school preparation, preferences for schooling, the borrowing rate, and ex post payoffs to college on the probability of various post secondary college outcomes and the ex ante Return to starting college. The model provides the basis for a simple empirical method of accounting for uncertainty about Educational outcomes and for nonlinearity in the relationship between years of Education and earnings when estimating the expected Return to the first year of college. I present estimates of the effects of gender, aptitude, high school curriculum, family background characteristics, and other variables on the expected Return to starting college.
Arthur Sakamoto - One of the best experts on this subject based on the ideXlab platform.
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Women’s Progress for Men’s Gain? Gender-Specific Changes in the Return to Education as Measured by Family Standard of Living, 1990 to 2009–2011
Demography, 2017Co-Authors: Changhwan Kim, Arthur SakamotoAbstract:This study investigates gender-specific changes in the total financial Return to Education among persons of prime working ages (35–44 years) using U.S. Census data from 1990 and 2000, and the 2009–2011 American Community Survey. We define the total financial Return to Education as the family standard of living as measured by family income adjusted for family size. Our results indicate that women experienced significant progress in Educational attainment and labor market outcomes over this time period. Ironically, married women’s progress in Education and personal earnings has led to greater improvement in the family standard of living for married men than for women themselves. Gender-specific changes in assortative mating are mostly responsible for this paradoxical trend. Because the number of highly educated women exceeds the number of highly educated men in the marriage market, the likelihood of Educational marrying up has substantially increased for men over time while women’s likelihood has decreased. Sensitivity analyses show that the greater improvement in the family standard of living for men than for women is not limited to prime working-age persons but is also evident in the general population. Consequently, women’s Return to Education through marriage declined while men’s financial gain through marriage increased considerably.
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Women's Progress for Men's Gain? Gender-Specific Changes in the Return to Education as Measured by Family Standard of Living, 1990 to 2009-2011
Demography, 2017Co-Authors: Changhwan Kim, Arthur SakamotoAbstract:This study investigates gender-specific changes in the total financial Return to Education among persons of prime working ages (35–44 years) using U.S. Census data from 1990 and 2000, and the 2009–2011 American Community Survey. We define the total financial Return to Education as the family standard of living as measured by family income adjusted for family size. Our results indicate that women experienced significant progress in Educational attainment and labor market outcomes over this time period. Ironically, married women’s progress in Education and personal earnings has led to greater improvement in the family standard of living for married men than for women themselves. Gender-specific changes in assortative mating are mostly responsible for this paradoxical trend. Because the number of highly educated women exceeds the number of highly educated men in the marriage market, the likelihood of Educational marrying up has substantially increased for men over time while women’s likelihood has decreased. Sensitivity analyses show that the greater improvement in the family standard of living for men than for women is not limited to prime working-age persons but is also evident in the general population. Consequently, women’s Return to Education through marriage declined while men’s financial gain through marriage increased considerably.
