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Does Education Raise Productivity, or Just Reflect it? Author info | Abstract | Publisher info | Download info | Related research | Statistics Arnaud Chevalier
Colm Harmon
Ian Walker
Yu Zhu
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Education has an important effect on wages but it not clear whether this is because education raises productivity or because education is simply a signal of ability. We implement a number of existing tests for discriminating between these two explanations and find that they do not support the signalling hypothesis. However, we have severe reservations about these results and we propose an alternative test based on changes in education incentives caused by changes in the minimum school leaving age in the 1970s. Using this idea we find that UK data appear to strongly support the human capital explanation. Copyright 2004 Royal Economic Society.
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Article provided by Royal Economic Society in its journal The Economic Journal .
Volume (Year): 114 (2004)
Issue (Month): 499 (November)
Pages: F499-F517
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Handle: RePEc:ecj:econjl:v:114:y:2004:i:499:p:f499-f517Contact details of provider: Web page: http://www.res.org.uk/ More information through EDIRC
Order Information: Web: http://www.blackwellpublishers.co.uk/asp/journal.asp?ref=0013-0133
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Keywords: Other versions of this item:
Paper Chevalier, Arnaud & Harmon, Colm & Walker, Ian & Zhu, Yu, 2003.
"Does Education Raise Productivity or Just Reflect It? ,"
CEPR Discussion Papers
3993, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Arnaud Chevalier & Colm Harmon & Ian Walker & Yu Zhu, 2003.
"Does education raise productivity, or just reflect it? ,"
Working Papers
200304, School Of Economics, University College Dublin.
[Downloadable!] References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Colm Harmon; & Ian Walker, 1995.
"Estimates of Economic Return to Schooling in the UK ,"
Economics, Finance and Accounting Department Working Paper Series
n540195, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
Colm Harmon & Vincent Hogan & Ian Walker, 2001.
"Dispersion in the Economic Return to Schooling ,"
Working Papers
200116, School Of Economics, University College Dublin.
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Other versions:
Harmon, Colm & Hogan, Vincent & Walker, Ian, 2001.
"Dispersion in the Economic Return to Schooling ,"
CEPR Discussion Papers
3037, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Harmon, Colm & Hogan, Vincent & Walker, Ian, 2003.
"Dispersion in the economic return to schooling ,"
Labour Economics ,
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"The Screening Hypothesis: An Application of the Wiles Test ,"
Economic Inquiry ,
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Kelly Bedard, 2001.
"Human Capital versus Signaling Models: University Access and High School Dropouts ,"
Journal of Political Economy ,
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Other versions: Layard, Richard & Psacharopoulos, George, 1974.
"The Screening Hypothesis and the Returns to Education ,"
Journal of Political Economy ,
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Hungerford, Thomas & Solon, Gary, 1987.
"Sheepskin Effects in the Returns to Education ,"
The Review of Economics and Statistics ,
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Richard Blundell & Lorraine Dearden & Barbara Sianesi, 2003.
"Evaluating the impact of education on earnings in the UK: Models, methods and results from the NCDS ,"
IFS Working Papers
W03/20, Institute for Fiscal Studies.
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Other versions: Riley, John G, 1979.
"Testing the Educational Screening Hypothesis ,"
Journal of Political Economy ,
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Arnaud Chevalier, 2000.
"Graduate over-education in the UK ,"
CEE Discussion Papers
0007, Centre for the Economics of Education, LSE.
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William N. Evans & Edward Montgomery, 1994.
"Education and Health: Where There's Smoke There's an Instrument ,"
NBER Working Papers
4949, National Bureau of Economic Research, Inc.
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Stacy Berg Dale & Alan B. Krueger, 2002.
"Estimating The Payoff To Attending A More Selective College: An Application Of Selection On Observables And Unobservables ,"
The Quarterly Journal of Economics ,
MIT Press, vol. 117(4), pages 1491-1527, November.
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Other versions: Harmon, C & Ian Walker, 1995.
"Estimates of the economic return to schooling for the UK ,"
IFS Working Papers
W95/12, Institute for Fiscal Studies.
Taubman, Paul J & Wales, Terence J, 1973.
"Higher Education, Mental Ability, and Screening ,"
Journal of Political Economy ,
University of Chicago Press, vol. 81(1), pages 28-55, Jan.-Feb..
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Groot, Wim & Oosterbeek, Hessel, 1994.
"Earnings Effects of Different Components of Schooling: Human Capital versus Screening ,"
The Review of Economics and Statistics ,
MIT Press, vol. 76(2), pages 317-21, May.
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Spence, A Michael, 1973.
"Job Market Signaling ,"
The Quarterly Journal of Economics ,
MIT Press, vol. 87(3), pages 355-74, August.
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Joseph G. Altonji & Charles R. Pierret, 2001.
"Employer Learning And Statistical Discrimination ,"
The Quarterly Journal of Economics ,
MIT Press, vol. 116(1), pages 313-350, February.
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Other versions:
Joseph G. Altonji & Charles R. Pierret, .
"Employer Learning and Statistical Discrimination ,"
IPR working papers
97-18, Institute for Policy Resarch at Northwestern University.
Joseph G. Altonji & Charles R. Pierret, 1997.
"Employer Learning and Statistical Discrimination ,"
NBER Working Papers
6279, National Bureau of Economic Research, Inc.
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"Employer learning and statistical discrimination ,"
Working Paper Series, Macroeconomic Issues
WP-97-11, Federal Reserve Bank of Chicago.
Lazear, Edward, 1977.
"Academic Achievement and Job Performance: Note ,"
American Economic Review ,
American Economic Association, vol. 67(2), pages 252-54, March.
[Downloadable!] (restricted)
Full
references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Chevalier, Arnaud & Harmon, Colm & O’Sullivan, Vincent & Walker, Ian, 2005.
"The Impact of Parental Income and Education on the Schooling of Their Children ,"
IZA Discussion Papers
1496, Institute for the Study of Labor (IZA).
[Downloadable!]
Other versions: Richard Blundell & Lorraine Dearden & Barbara Sianesi, 2003.
"Evaluating the impact of education on earnings in the UK: Models, methods and results from the NCDS ,"
IFS Working Papers
W03/20, Institute for Fiscal Studies.
[Downloadable!]
Other versions: Nohora Y. Forero Ramírez & Manuel Ramírez Gómez, 2008.
"Determinantes de los ingresos laborales de los graduados universitarios en Colombia: un análisis a partir de la Herramienta de Seguimiento a Graduados ,"
REVISTA DE ECONOMÍA DEL ROSARIO ,
UNIVERSIDAD DEL ROSARIO - FACULTAD DE ECONOMÍA.
[Downloadable!]
Melanie Jones & Paul Latreille & Peter Sloane, 2006.
"Disability, Gender and the Labour Market in Wales ,"
Regional Studies ,
Taylor and Francis Journals, vol. 40(8), pages 823-845, November.
[Downloadable!] (restricted)
Massimiliano Bratti & Robin Naylor & Jeremy Smith, 2005.
"Variations in the Wage Returns to a First Degree: Evidence from the British Cohort Study 1970 ,"
IZA Discussion Papers
1631, Institute for the Study of Labor (IZA).
[Downloadable!]
Other versions: Eliasson, Kent, 2006.
"The Role of Ability in Estimating the Returns to College Choice: New Swedish Evidence ,"
Umeå Economic Studies
691, Umeå University, Department of Economics.
[Downloadable!]
Yuki, Kazuhiro, 2009.
"Education, Signaling, and Wage Inequality in a Dynamic Economy ,"
MPRA Paper
16982, University Library of Munich, Germany.
[Downloadable!]
Savanti, Maria Paula & Patrinos, Harry Anthony, 2005.
"Rising returns to schooling in Argentina, 1992-2002 : productivity or credentialism? ,"
Policy Research Working Paper Series
3714, The World Bank.
[Downloadable!]
Nohora Y. Forero Ramírez & Manuel Ramírez Gómez, 2008.
"Determinantes de los ingresos laborales de los graduados universitarios durante el período 2001-2004 ,"
DOCUMENTOS DE TRABAJO
004591, UNIVERSIDAD DEL ROSARIO - FACULTAD DE ECONOMÍA.
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Marc Gurgand & Eric Maurin, 2007.
"A large scale experiment: wages and educational expansion in France ,"
PSE Working Papers
2007-21, PSE (Ecole normale supérieure).
[Downloadable!]
Other versions: repec:ese:iserwp: is not listed on IDEAS
Ian Walker & Yu Zhu, 2007.
"The College Wage Premium, Overeducation, and the Expansion of Higher Education in the UK by and ,"
Working Papers
200720, Geary Institute, University College Dublin.
[Downloadable!]
O'Leary, Nigel C. & Sloane, Peter J., 2005.
"The Changing Wage Return to an Undergraduate Education ,"
IZA Discussion Papers
1549, Institute for the Study of Labor (IZA).
[Downloadable!]
Ian Walker & Yu Zhu, 2005.
"The College Wage Premium, Overeducation, and the Expansion of Higher Education in the UK ,"
IZA Discussion Papers
1627, Institute for the Study of Labor (IZA).
[Downloadable!]
Chris Sakellariou, 2005.
"Profitability of Vocational vs. Formal Education for Men and Women in Singapore Using Quantile Regressions ,"
Economic Growth centre Working Paper Series
0502, Nanyang Technolgical University, School of Humanities and Social Sciences, Economic Growth centre.
[Downloadable!]
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