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Return to college education revisited: Is relevance relevant?

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  • Yakusheva, Olga
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    Abstract

    This study examines whether the size of the college earnings premium varies depending on the quality of the match between an individual's degree field and his/her occupation. The study uses the Occupational Information Network (O*NET) to obtain a new measure of the quality of occupational match for a sample of 2268 young adults with post-secondary degrees from the restricted use High School and Beyond (1980/92) data. The study finds that people whose occupations better match their degree fields earn significantly higher returns to post-secondary schooling. This result is robust to controlling for an extensive set of pre-existing differences among individuals, and to accounting for differences in earnings across post-secondary degree fields.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economics of Education Review.

    Volume (Year): 29 (2010)
    Issue (Month): 6 (December)
    Pages: 1125-1142

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    Handle: RePEc:eee:ecoedu:v:29:y:2010:i:6:p:1125-1142

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    Web page: http://www.elsevier.com/locate/econedurev

    Related research

    Keywords: Return to schooling Occupational match quality;

    References

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    1. Miller, Robert A, 1984. "Job Matching and Occupational Choice," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 1086-120, December.
    2. Omar Arias & Kevin F. Hallock & Walter Sosa Escudero, 1999. "Individual Heterogeneity in the Returns to Schooling: Instrumental Variables Quantile Regression using Twins Data," Department of Economics, Working Papers 016, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.
    3. Clifford Clogg & James Shockey, 1984. "Mismatch between occupation and schooling: A prevalence measure, recent trends and demographic analysis," Demography, Springer, vol. 21(2), pages 235-257, May.
    4. Sicherman, Nachum, 1991. ""Overeducation" in the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 9(2), pages 101-22, April.
    5. Jacob A. Mincer, 1974. "The Human Capital Earnings Function," NBER Chapters, in: Schooling, Experience, and Earnings, pages 83-96 National Bureau of Economic Research, Inc.
    6. Russell W. Rumberger, 1987. "The Impact of Surplus Schooling on Productivity and Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 22(1), pages 24-50.
    7. Hungerford, Thomas & Solon, Gary, 1987. "Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 175-77, February.
    8. Jaeger, David A & Page, Marianne E, 1996. "Degrees Matter: New Evidence on Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 733-40, November.
    9. Marco Manacorda & Barbara Petrongolo, 1996. "Skill Mismatch and Unemployment in OECD Countries," CEP Discussion Papers dp0307, Centre for Economic Performance, LSE.
    10. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
    11. 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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    Cited by:
    1. Liu, Liqun & Neilson, William S., 2011. "High scores but low skills," Economics of Education Review, Elsevier, vol. 30(3), pages 507-516, June.
    2. Domadenik, Polona & Farčnik, DaÅ¡a & Pastore, Francesco, 2013. "Horizontal Mismatch in the Labour Market of Graduates: The Role of Signalling," IZA Discussion Papers 7527, Institute for the Study of Labor (IZA).
    3. Doan, Tinh, 2011. "Labour market returns to higher education in Vietnam," Economics Discussion Papers 2011-4, Kiel Institute for the World Economy.

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