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Does Education Raise Productivity or Just Reflect It? Author info | Abstract | Publisher info | Download info | Related research | Statistics Chevalier, Arnaud
Harmon, Colm
Walker, Ian
Zhu, Yu
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registered author(s):
It is clear that education has an important effect on wages paid in the labour market. It is not clear, however, whether this is due to the role that education plays in raising the productivity of workers (the human capital explanation) or whether education simply reflects the ability of the worker (through a signalling role). In this Paper we describe and implement, using a variety of UK datasets, a number of tests from the existing literature for discriminating between the two explanations. We find little support for signalling ideas in these tests. We have, however, severe reservations about these results because of our doubts about the power of these tests and the appropriateness of the data. We propose an alternative test, based on the response of some individuals to a change in education incentives offered to other individuals caused by the changes in the minimum school leaving age in the 1970s. Using this idea, we find that data in the UK appears to strongly support the human capital explanation.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
3993.
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Date of creation: Jul 2003Date of revision:
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Keywords: human capital screening signalling Other versions of this item:
Find related papers by JEL classification: I20 - Health, Education, and Welfare - - Education - - - General J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
This paper has been announced in the following NEP Reports :
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.
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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.)
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IFS Working Papers
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"Disability, Gender and the Labour Market in Wales ,"
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repec:ese:iserwp: is not listed on IDEAS
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Ian Walker & Yu Zhu, 2005.
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"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.
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