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Declining Returns to Education in Norway? Comparing Estimates across Cohorts, Sectors and over Time

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  • Torbjørn Haegeland
  • Tor Jakob Klette
  • Kjell G. Salvanes

Abstract

We examine the role of the Norwegian education system in explaining the moderate and stable earnings dispersion in Norway. Estimating earnings equations for 1980 and 1990, we find that returns to education have been remarkably stable in Norway, also when we compare returns to education across different sectors of the economy. Our analysis controls for self‐selection into education by using an instrumental variable technique. We estimate separate education earnings profiles for different cohorts to identify the effect on wage premiums of the large changes that have taken place in the Norwegian education system. The substantially higher level of educational attainment for more recent cohorts does not, cet. par., seem to have a negative effect on educational wage premiums for these younger cohorts. JEL classification: J24, J31, I

Suggested Citation

  • Torbjørn Haegeland & Tor Jakob Klette & Kjell G. Salvanes, 1999. "Declining Returns to Education in Norway? Comparing Estimates across Cohorts, Sectors and over Time," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 555-576, December.
    • Handle: RePEc:bla:scandj:v:101:y:1999:i:4:p:555-576
    DOI: 10.1111/1467-9442.00173
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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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