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Changes across Cohorts in Wage Returns to Schooling and Early Work Experiences

Author

Listed:
  • Ashworth, Jared

    (Pepperdine University)

  • Hotz, V. Joseph

    (Duke University)

  • Maurel, Arnaud

    (Duke University)

  • Ransom, Tyler

    (University of Oklahoma)

Abstract
This paper investigates the wage returns to schooling and actual early work experiences, and how these returns have changed over the past twenty years. Using the NLSY surveys, we develop and estimate a dynamic model of the joint schooling and work decisions that young men make in early adulthood, and quantify how they affect wages using a generalized Mincerian specification. Our results highlight the need to account for dynamic selection and changes in composition when analyzing changes in wage returns. In particular, we find that ignoring the selectivity of accumulated work experiences results in overstatement of the returns to education.

Suggested Citation

  • Ashworth, Jared & Hotz, V. Joseph & Maurel, Arnaud & Ransom, Tyler, 2017. "Changes across Cohorts in Wage Returns to Schooling and Early Work Experiences," IZA Discussion Papers 11231, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp11231
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    schooling; human capital; wage returns; selection;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

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