Does the Choice of Reference Levels of Education Matter in the ORU Earnings Equation?

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Does the Choice of Reference Levels of Education Matter in the ORU Earnings Equation?

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Chiswick, Barry R. () (University of Illinois at Chicago)
Miller, Paul W. () (University of Western Australia)

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Abstract

This paper examines whether the results of the earnings equation developed in the overeducation/required eduation/under-education (ORU) literature are sensitive to whether the usual or reference levels of education are measured using the Realized Matches or Worker Self-Assessment methods. The analyses are conducted for all male native-born and immigrant workers in the US, by level of skill, and by occupation. While point estimates differ, particularly when earnings equations are estimated for the smaller samples of sub-groups of the workforce, the general findings are robust to this measurement issue. Thus, the answers provided to the typical research questions in the ORU literature on the utilization of schooling are independent of the measure of the usual or reference level of education used in the analyses.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4382.

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Length: 32 pages
Date of creation: Aug 2009
Date of revision:
Handle: RePEc:iza:izadps:dp4382

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Find related papers by JEL classification:
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
F22 - International Economics - - International Factor Movements and International Business - - - International Migration

This paper has been announced in the following NEP Reports:

NEP-ALL-2009-10-10 (All new papers)
NEP-HRM-2009-10-10 (Human Capital & Human Resource Management)
NEP-LAB-2009-10-10 (Labour Economics)
NEP-MIG-2009-10-10 (Economics of Human Migration)

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This page was last updated on 2009-12-7.

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