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On‐Farm and Off‐Farm Returns to Education among Farm Operators in Northern Ireland

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  • Wallace, Michael T.
  • Jack, Claire G.
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    Abstract

    This paper estimates returns to education for a sample of farm operators in Northern Ireland. The analysis examines the relationship between education and on-farm and off-farm labour incomes. Human capital earnings functions are estimated to identify the marginal return to education measured as years of schooling as well as the qualification level attained. Extending to a structural model, the methodology controls for the endogeneity of education in the earnings function and potential selection bias associated with off-farm labour market participation. In off-farm employment, the analysis shows that returns to education are of the order of between 6% and 9% for each additional year of schooling. However, on-farm earnings were not found to be significantly related to years of education, although the analysis does identify a significant on-farm return to an agricultural qualification

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    Bibliographic Info

    Paper provided by Agricultural Economics Society in its series 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK with number 108786.

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    Date of creation: Apr 2011
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    Handle: RePEc:ags:aesc11:108786

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    Related research

    Keywords: Human Capital; Time Allocation and Labor Supply; Agricultural Labor Markets; Wage Level; Labor and Human Capital; J24; J22; J43; J31;

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    1. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
    2. Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August.
    3. Goetz, Stephan J. & Rupasingha, Anil, 2004. "The Returns to Education in Rural Areas," The Review of Regional Studies, Southern Regional Science Association, vol. 34(3), pages 245-59.
    4. MaCurdy, Thomas E, 1981. "An Empirical Model of Labor Supply in a Life-Cycle Setting," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1059-85, December.
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    7. 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.
    8. Welch, F, 1970. "Education in Production," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 35-59, Jan.-Feb..
    9. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    10. 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.
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    15. Brown, Sarah & Sessions, John G., 1999. "Education and employment status: a test of the strong screening hypothesis in Italy," Economics of Education Review, Elsevier, vol. 18(4), pages 397-404, October.
    16. Jolliffe, Dean, 2004. "The impact of education in rural Ghana: examining household labor allocation and returns on and off the farm," Journal of Development Economics, Elsevier, vol. 73(1), pages 287-314, February.
    17. Lockheed, Marlaine E & Jamison, Dean T & Lau, Lawrence J, 1980. "Farmer Education and Farm Efficiency: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 29(1), pages 37-76, October.
    18. Esperanza Vera-Toscano & Euan Phimister & Alfons Weersink, 2004. "Panel Estimates of the Canadian Rural/Urban Women's Wage Gap," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 1138-1151.
    19. Huffman, Wallace E. & Orazem, Peter, 2007. "The Role of Agriculture and Human Capital in Economic Growth: Farmers, Schooling, and Health," Staff General Research Papers 12003, Iowa State University, Department of Economics.
    20. Ham, John C, 1982. "Estimation of a Labour Supply Model with Censoring Due to Unemployment and Underemployment," Review of Economic Studies, Wiley Blackwell, vol. 49(3), pages 335-54, July.
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