Advanced Search
MyIDEAS: Login

Interpreting Degree Effects in the Returns to Education

Contents:

Author Info

  • Alfonso Flores-Lagunes
  • Audrey Light

Abstract

Researchers often identify degree effects by including degree attainment (D) and years of schooling (S) in a wage model, yet the source of independent variation in these measures is not well understood. We argue that S is negatively correlated with ability among degree-holders because the most able graduate the fastest, but positively correlated among dropouts because the most able benefit from increased schooling. Using NLSY79 data, we find support for this argument; our findings also suggest that highest grade completed is the preferred measure of S for dropouts, while age at school exit is a more informative measure for degree-holders.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://jhr.uwpress.org/cgi/reprint/45/2/439
Download Restriction: A subscripton is required to access pdf files. Pay per article is available.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 45 (2010)
Issue (Month): 2 ()
Pages:

as in new window
Handle: RePEc:uwp:jhriss:v:45:y:2010:i2:p439-467

Contact details of provider:
Web page: http://jhr.uwpress.org/

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

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.:
as in new window
  1. Lee, Lung-Fei & Porter, Robert H, 1984. "Switching Regression Models with Imperfect Sample Separation Information-With an Application on Cartel Stability," Econometrica, Econometric Society, vol. 52(2), pages 391-418, March.
  2. Stacy Berg Dale & Alan B. Krueger, 1999. "Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables," NBER Working Papers 7322, National Bureau of Economic Research, Inc.
  3. Dominic J. Brewer & Eric R. Eide & Ronald G. Ehrenberg, 1999. "Does It Pay to Attend an Elite Private College? Cross-Cohort Evidence on the Effects of College Type on Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 34(1), pages 104-123.
  4. Arrow, Kenneth J., 1973. "Higher education as a filter," Journal of Public Economics, Elsevier, vol. 2(3), pages 193-216, July.
  5. Richard B. Freeman, 1983. "Longitudinal Analyses of the Effects of Trade Unions," NBER Working Papers 1207, National Bureau of Economic Research, Inc.
  6. Christopher J. Ruhm, 1995. "Is High School Employment Consumption or Investment?," NBER Working Papers 5030, National Bureau of Economic Research, Inc.
  7. Daniel Parent, 2006. "Work while in high school in Canada: its labour market and educational attainment effects," Canadian Journal of Economics, Canadian Economics Association, vol. 39(4), pages 1125-1150, November.
  8. Fabian Lange, 2007. "The Speed of Employer Learning," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 1-35.
  9. Neal, Derek A & Johnson, William R, 1996. "The Role of Premarket Factors in Black-White Wage Differences," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 869-95, October.
  10. Ralph Stinebrickner & Todd R. Stinebrickner, 2003. "Working during School and Academic Performance," Journal of Labor Economics, University of Chicago Press, vol. 21(2), pages 449-472, April.
  11. Dominic J. Brewer & Eric Eide & Ronald G. Ehrenberg, 1996. "Does It Pay To Attend An Elite Private College? Cross Cohort Evidence on the Effects of College Quality on Earnings," NBER Working Papers 5613, National Bureau of Economic Research, Inc.
  12. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2000. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," NBER Working Papers 7831, National Bureau of Economic Research, Inc.
  13. John Bound & Sarah Turner, 2007. "Understanding the Increased Time to the Baccalaureate Degree," Discussion Papers 06-043, Stanford Institute for Economic Policy Research.
  14. 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..
  15. Light Audrey & Flores-Lagunes Alfonso, 2006. "Measurement Error in Schooling: Evidence from Samples of Siblings and Identical Twins," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-35, May.
  16. Audrey Light & Wayne Strayer, 2003. "Who Receives the College Wage Premium? Assessing the Labor Market Returns to Degrees and College Transfer Patterns," Working Papers 03-02, Ohio State University, Department of Economics.
  17. Gerald S. Oettinger, 1999. "Does high school employment affect high school academic performance?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 53(1), pages 136-151, October.
  18. 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.
  19. Joseph G. Altonji & Charles R. Pierret, 1997. "Employer Learning and Statistical Discrimination," NBER Working Papers 6279, National Bureau of Economic Research, Inc.
  20. 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.
  21. Arcidiacono, Peter, 2004. "Ability sorting and the returns to college major," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 343-375.
  22. Weiss, Andrew, 1983. "A Sorting-cum-Learning Model of Education," Journal of Political Economy, University of Chicago Press, vol. 91(3), pages 420-42, June.
  23. Light, Audrey, 1999. "High school employment, high school curriculum, and post-school wages," Economics of Education Review, Elsevier, vol. 18(3), pages 291-309, June.
  24. Park, Jin Heum, 1999. "Estimation of sheepskin effects using the old and the new measures of educational attainment in the Current Population Survey," Economics Letters, Elsevier, vol. 62(2), pages 237-240, February.
  25. Ana M. Ferrer & W. Craig Riddell, 2002. "The role of credentials in the Canadian labour market," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 879-905, November.
  26. Orley Ashenfelter & Alan Krueger, 1992. "Estimates of the Economic Return to Schooling from a New Sample of Twins," Working Papers 683, Princeton University, Department of Economics, Industrial Relations Section..
  27. 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.
  28. John Bound & Sarah Turner, 2006. "Cohort Crowding: How Resources Affect Collegiate Attainment," NBER Working Papers 12424, National Bureau of Economic Research, Inc.
  29. Arkes, Jeremy, 1999. "What Do Educational Credentials Signal and Why Do Employers Value Credentials?," Economics of Education Review, Elsevier, vol. 18(1), pages 133-141, February.
  30. Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August.
  31. Hilmer, Michael J., 1997. "Does community college attendance provide a strategic path to a higher quality education?," Economics of Education Review, Elsevier, vol. 16(1), pages 59-68, February.
  32. Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001. "Measurement error in survey data," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843 Elsevier.
  33. Thomas J. Kane & Cecilia Elena Rouse & Douglas Staiger, 1999. "Estimating Returns to Schooling When Schooling is Misreported," NBER Working Papers 7235, National Bureau of Economic Research, Inc.
  34. Rouse, Cecilia Elena, 1995. "Democratization or Diversion? The Effect of Community Colleges on Educational Attainment," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 217-24, April.
  35. Lange, Fabian & Topel, Robert, 2006. "The Social Value of Education and Human Capital," Handbook of the Economics of Education, Elsevier.
  36. Belman, Dale & Heywood, John S, 1991. "Sheepskin Effects in the Returns to Education: An Examination on Women and Minorities," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 720-24, November.
  37. Sarah Turner, 2004. "Going to College and Finishing College.Explaining Different Educational Outcomes," NBER Chapters, in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 13-62 National Bureau of Economic Research, Inc.
  38. Thomas J. Kane & Cecilia Rouse & Douglas Staiger, 1999. "Estimating Returns to Schooling When Schooling is Misreported," Working Papers 798, Princeton University, Department of Economics, Industrial Relations Section..
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Carlos A. Flores & Alfonso Flores-Lagunes, 2010. "Partial Identification of Local Average Treatment Effects with an Invalid Instrument," Working Papers 2010-24, University of Miami, Department of Economics.
  2. Light, Audrey & McGee, Andrew, 2012. "Employer Learning and the "Importance" of Skills," IZA Discussion Papers 6623, Institute for the Study of Labor (IZA).
  3. John Bound & Sarah Turner, 2007. "Understanding the Increased Time to the Baccalaureate Degree," Discussion Papers 06-043, Stanford Institute for Economic Policy Research.
  4. O’Mahony, Mary & Pastor, José Manuel & Peng, Fei & Serrano, Lorenzo & Hernández, Laura, 2012. "Output growth in the post‐compulsory education sector: the European experience," MPRA Paper 44016, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:uwp:jhriss:v:45:y:2010:i2:p439-467. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.