Estimating the Return to Endogenous Schooling Decisions via Conditional Second Moments
AbstractThis paper employs conditional second moments to identify the impact of education in wage regressions where education is treated as endogenous. This approach avoids the use of instrumental variables in a setting where instruments are frequently not available. We employ this methodology to estimate the returns to schooling for a sample of Australian workers. We find that accounting for the endogeneity of education in this manner increases the estimated return to education from 6 percent to 10 percent.
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Bibliographic InfoArticle provided by University of Wisconsin Press in its journal Journal of Human Resources.
Volume (Year): 44 (2009)
Issue (Month): 4 ()
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Web page: http://jhr.uwpress.org/
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- Francis Vella & Lídia Farré & Roger Klein, 2008.
"A Parametric Control Function Approach to Estimating the Returns to Schooling in the Absence of Exclusion Restrictions: An Application to the NLSY,"
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- Lídia Farré & Roger Klein & Francis Vella, 2013. "A parametric control function approach to estimating the returns to schooling in the absence of exclusion restrictions: an application to the NLSY," Empirical Economics, Springer, vol. 44(1), pages 111-133, February.
- Farré, Lídia & Klein, Roger & Vella, Francis, 2010. "A Parametric Control Function Approach to Estimating the Returns to Schooling in the Absence of Exclusion Restrictions: An Application to the NLSY," IZA Discussion Papers 4935, Institute for the Study of Labor (IZA).
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- Saniter, Nils, 2012. "Estimating Heterogeneous Returns to Education in Germany via Conditional Second Moments," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62050, Verein für Socialpolitik / German Economic Association.
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