Estimating the returns to educational mismatch with panel data: the role of unobserved heterogeneity
AbstractUsing longitudinal data from the Swiss Household Panel, this analysis suggests that the cross-sectional estimates of the returns to educational mismatch are significantly biased when unobserved heterogeneity is omitted in the wage equation. The results of the standard fixed effects model indeed demonstrate that the wage returns to education are independent of the job requirements. Hence, this empirical analysis supports the human capital interpretation of the Swiss labour market.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2011036.
Date of creation: 20 Jun 2011
Date of revision:
Educational mismatch; wages; panel data analysis; human capital;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-07 (All new papers)
- NEP-EDU-2011-11-07 (Education)
- NEP-HRM-2011-11-07 (Human Capital & Human Resource Management)
- NEP-LAB-2011-11-07 (Labour Economics)
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