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Full-time Schooling, Part-time Schooling, and Wages: Returns and Risks in Portugal

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  • Andini, Corrado

    ()
    (University of Madeira)

  • Pereira, Pedro T.

    ()
    (University of Madeira)

Abstract

The standard wage equation proposed by Mincer (1974) assumes that individuals start working after leaving school, which is not the actual case for many people. Using longitudinal data on Portuguese male workers, former working students, we estimate the total impact of an additional year of full-time schooling on both the mean and the shape of the conditional wage distribution. The same exercise is also performed for part-time schooling. We find that the conditional average earnings return to one year of part-time schooling is much lower than the analogous return to one year of full-time schooling. However, the conditional wage risk implied by one year of part-time schooling is much lower than the analogous risk implied by one year of full-time schooling, thus complicating policy considerations. Nevertheless, we find evidence that the full-time schooling strategy dominates, in conditional wage distribution, the part-time schooling strategy, meaning that the choice of working while enrolled in school does not ultimately pay.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2651.

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Length: 23 pages
Date of creation: Mar 2007
Date of revision:
Handle: RePEc:iza:izadps:dp2651

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Keywords: working students; return to schooling; wage level; panel data;

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  1. Telhado Pereira, Pedro & Silva Martins, Pedro, 2002. "Is there a return-risk link in education?," Economics Letters, Elsevier, vol. 75(1), pages 31-37, March.
  2. Häkkinen, Iida, 2004. "Working while enrolled in a university: Does it pay?," Working Paper Series 2004:1, Uppsala University, Department of Economics.
  3. Colm Harmon & Vincent Hogan & Ian Walker, 2001. "Dispersion in the Economic Return to Schooling," Working Papers 200116, School Of Economics, University College Dublin.
  4. Pedro Telhado Pereira & Pedro Silva Martins, 2004. "Returns to education and wage equations," Applied Economics, Taylor & Francis Journals, vol. 36(6), pages 525-531.
  5. Vincent Hogan & Ian Walker, 2006. "Education Choice under Uncertainty - Implications for Public Policy," Working Papers 200615, School Of Economics, University College Dublin.
  6. Joop Hartog & Hans van Ophem & Simona Maria Bajdechi, 2004. "How Risky is Investment in Human Capital?," CESifo Working Paper Series 1261, CESifo Group Munich.
  7. V. Joseph Hotz & Lixin Colin Xu & Marta Tienda & Avner Ahituv, 2002. "Are There Returns To The Wages Of Young Men From Working While In School?," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 221-236, May.
  8. Hartog, Joop & Vijverberg, Wim, 2007. "Schools, skills and risk," Economics of Education Review, Elsevier, vol. 26(6), pages 758-770, December.
  9. Levhari, David & Weiss, Yoram, 1974. "The Effect of Risk on the Investment in Human Capital," American Economic Review, American Economic Association, vol. 64(6), pages 950-63, December.
  10. Joao Pedro Azevedo, 2004. "GRQREG: Stata module to graph the coefficients of a quantile regression," Statistical Software Components S437001, Boston College Department of Economics, revised 17 Mar 2011.
  11. Corrado Andini, 2007. "The total impact of schooling on within-groups wage inequality in Portugal," Applied Economics Letters, Taylor & Francis Journals, vol. 15(2), pages 85-90.
  12. Corrado Andini, 2007. "Returns to education and wage equations: a dynamic approach," Applied Economics Letters, Taylor & Francis Journals, vol. 14(8), pages 577-579.
  13. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
  14. Corrado Andini, 2009. "On the return-risk link in education," Applied Economics Letters, Taylor & Francis Journals, vol. 16(3), pages 307-314.
  15. Hogan, Vincent & Ian Walker, 2002. "Education Choice under Uncertainty," Royal Economic Society Annual Conference 2002 103, Royal Economic Society.
  16. Martins, Pedro S. & Pereira, Pedro T., 2004. "Does education reduce wage inequality? Quantile regression evidence from 16 countries," Labour Economics, Elsevier, vol. 11(3), pages 355-371, June.
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