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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.

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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Bibliographic 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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Keywords: EDUCATION ; WAGES ; DISTRIBUTION;

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Cited by:
  1. 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.
  2. DiNardo, John & Tobias, Justin, 2001. "Nonparametric Density and Regression Estimation," Staff General Research Papers 12020, Iowa State University, Department of Economics.
  3. Thomas Cornelissen & Uwe Jirjahn & Georgi Tsertsvadze, 2008. "Parental Background and Earnings: German Evidence on Direct and Indirect Relationship," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 228(5+6), pages 554-572, December.
  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.
  5. 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.
  6. Black, Dan A. & Smith, J.A.Jeffrey A., 2004. "How robust is the evidence on the effects of college quality? Evidence from matching," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 99-124.
  7. 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.
  8. 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.
  9. Darío Maldonado, 2008. "Education policies and optimal taxation," International Tax and Public Finance, Springer, vol. 15(2), pages 131-143, April.
  10. Bernarda Zamora Talaya & 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).
  11. Astrid Krenz, 2008. "Theorie und Empirie über den Wirkungszusammenhang zwischen sozialer Herkunft, kulturellem und sozialem Kapital, Bildung und Einkommen in der Bundesrepublik Deutschland," SOEPpapers on Multidisciplinary Panel Data Research 128, DIW Berlin, The German Socio-Economic Panel (SOEP).
  12. David Newhouse & Daniel Suryadarma, 2011. "The Value of Vocational Education: High School Type and Labor Market Outcomes in Indonesia," World Bank Economic Review, World Bank Group, vol. 25(2), pages 296-322, May.

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