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Are Return to Schooling Concentrated Among the Most Able? A Semiparametric Analysis of the Ability-Earnings Relationship

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Author Info
Tobias, J.L.

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Abstract

In this paper, I explore the ability-earnings relationships semiparametrically. I find evidence of nonlinearities in these relationships which vary across levels of schooling, and argue that ability-sorting into higher education creates problems for accurately identifing the return to schooling over the full ability support. Over an ability support which is "common" to those with and without a college education, we find that the college log wage premium is increasing for the more able, and this premium grew during the period 1984-1994 for individuals at all points in the ability distribution.

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Publisher Info
Paper provided by California Irvine - School of Social Sciences in its series Papers with number 00-01-12.

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Length: 24 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:fth:calirv:00-01-12

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Postal: UNIVERSITY OF CALIFORNIA IRVINE, SCHOOL OF SOCIAL SCIENCES, IRVINECALIFORNIA 91717 U.S.A.

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Related research
Keywords: EDUCATION ; WAGES ; DISTRIBUTION;

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Find related papers by JEL classification:
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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  1. Kevin Denny & Vincent O'Sullivan, 2004. "Can education compensate for low ability? Evidence from British data," IFS Working Papers W04/19, Institute for Fiscal Studies. [Downloadable!]
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  2. Gary Koop & Dale Poirier & Justin Tobias, 2003. "Bayesian Semiparametric Inference in Multiple Equation Models," Discussion Papers in Economics 04/17, Department of Economics, University of Leicester. [Downloadable!]
  3. Kevin Denny & Patrick Orla Doyle, 2005. "Returns to basic skills in Central and Eastern Europe - a semi-parametric approach," Working Papers 200507, School Of Economics, University College Dublin. [Downloadable!]
  4. Gary Koop & Justin Tobias, 2003. "Semiparametric Bayesian inference in smooth coefficient models," Discussion Papers in Economics 04/18, Department of Economics, University of Leicester. [Downloadable!]
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  5. Bernarda Zamora & Eduard Gracia, 2007. "Nature, Nurture And Market Conditions: Ability And Education In The Policy Evaluation Approach," Working Papers. Serie AD 2007-29, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  6. Dan A. Black & Jeffrey Smith, 2003. "How Robust is the Evidence on the Effects of College Quality? Evidence From Matching," University of Western Ontario, CIBC Human Capital and Productivity Project Working Papers 20033, University of Western Ontario, CIBC Human Capital and Productivity Project. [Downloadable!]
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  7. Eliasson, Kent, 2006. "The Role of Ability in Estimating the Returns to College Choice: New Swedish Evidence," UmeÃ¥ Economic Studies 691, Umeå University, Department of Economics. [Downloadable!]
  8. Astrid Krenz, 2008. "Theorie und Empirie über den Wirkungszusammenhang zwischen sozialer Herkunft, kulturellem und sozialem Kapital, Bildung und Einkommen in der Bundesrepublik Deutschland," SOEPpapers 128, DIW Berlin, The German Socio-Economic Panel (SOEP). [Downloadable!]
  9. John DiNardo & Justin L. Tobias, 2001. "Nonparametric Density and Regression Estimation," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 11-28, Fall. [Downloadable!] (restricted)
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  10. Eric Bettinger, 2004. "How Financial Aid Affects Persistence," NBER Chapters, in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 207-238 National Bureau of Economic Research, Inc. [Downloadable!]
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  11. Newhouse, David & Suryadarma, Daniel, 2009. "The value of vocational education : high school type and labor market outcomes in Indonesia," Policy Research Working Paper Series 5035, The World Bank. [Downloadable!]
  12. Darío Maldonado, 2008. "Education policies and optimal taxation," International Tax and Public Finance, Springer, vol. 15(2), pages 131-143, April. [Downloadable!] (restricted)
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