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

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Author Info
Corrado Andini () (University of Madeira and CEEAplA)
Pedro Telhado Pereira () (University of Madeira, CEEAplA, CEPR and IZA)

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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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Publisher 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
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Handle: RePEc:iza:izadps:dp2651

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

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Find related papers by JEL classification:
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data

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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.:
  1. Häkkinen, Iida, 2004. "Working while enrolled in a university: Does it pay?," Working Paper Series 2004:1, Uppsala University, Department of Economics. [Downloadable!]
    Other versions:
  2. Corrado Andini, 2008. "The total impact of schooling on within-groups wage inequality in Portugal," Applied Economics Letters, Taylor and Francis Journals, vol. 15(2), pages 85-90. [Downloadable!] (restricted)
  3. Joop Hartog & Hans van Ophem & Simona Maria Bajdechi, 2004. "How Risky is Investment in Human Capital?," Tinbergen Institute Discussion Papers 04-080/3, Tinbergen Institute. [Downloadable!]
  4. 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. [Downloadable!] (restricted)
  5. Corrado Andini, 2007. "Returns to education and wage equations: a dynamic approach," Applied Economics Letters, Taylor and Francis Journals, vol. 14(8), pages 577-579. [Downloadable!] (restricted)
  6. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January. [Downloadable!] (restricted)
  7. Pedro Telhado Pereira & Pedro Silva Martins, 2004. "Returns to education and wage equations," Applied Economics, Taylor and Francis Journals, vol. 36(6), pages 525-531, April. [Downloadable!] (restricted)
    Other versions:
  8. Hogan, Vincent & Ian Walker, 2002. "Education Choice under Uncertainty," Royal Economic Society Annual Conference 2002 103, Royal Economic Society. [Downloadable!]
  9. V. Joseph Hotz & Lixin Xu & Marta Tienda & Avner Ahituv, 1999. "Are There Returns to the Wages of Young Men from Working While in School?," NBER Working Papers 7289, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  10. 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. [Downloadable!] (restricted)
  11. Vincent Hogan & Ian Walker, 2006. "Education Choice under Uncertainty - Implications for Public Policy," Working Papers 200615, School Of Economics, University College Dublin. [Downloadable!]
    Other versions:
  12. Joop Hartog & Hans van Ophem & Simona Maria Bajdechi, 2004. "How Risky is Investment in Human Capital?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  13. Corrado Andini, 2009. "On the return-risk link in education," Applied Economics Letters, Taylor and Francis Journals, vol. 16(3), pages 307-314. [Downloadable!] (restricted)
  14. Harmon, Colm & Hogan, Vincent & Walker, Ian, 2003. "Dispersion in the economic return to schooling," Labour Economics, Elsevier, vol. 10(2), pages 205-214, April. [Downloadable!] (restricted)
    Other versions:
  15. Pereira, Pedro Telhado & Martins, Pedro Silva, 2001. "Is there a Return-Risk Link in Education?," IZA Discussion Papers 321, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  16. 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 01 Jan 2006. [Downloadable!]
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