Unobserved Heterogeneity and Risk in Wage Variance: Does Schooling Provide Earnings Insurance?
AbstractWe apply a recently proposed method to disentangle unobserved heterogeneity from risk in returns to education. We replicate the original study on US men and extend to US women, UK men and German men. Most original results are not robust. A college education cannot universally be considered an insurance against unpredictability of wages. One conclusion is unequivocally confirmed: uncertainty strongly dominates unobserved heterogeneity.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5531.
Length: 33 pages
Date of creation: Feb 2011
Date of revision:
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Other versions of this item:
- Jacopo Mazza & Hans van Ophem & Joop Hartog, 2011. "Unobserved Heterogeneity and Risk in Wage Variance: Does Schooling provide Earnings Insurance?," Tinbergen Institute Discussion Papers 11-045/3, Tinbergen Institute.
- C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-05 (All new papers)
- NEP-EUR-2011-03-05 (Microeconomic European Issues)
- NEP-LAB-2011-03-05 (Labour Economics)
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- Kässi, Otto, 2012.
"Uncertainty and Heterogeneity in Returns to Education: Evidence from Finland,"
48738, University Library of Munich, Germany, revised 01 Aug 2013.
- Kässi, Otto, 2012. "Uncertainty and Heterogeneity in Returns to Education: Evidence from Finland," MPRA Paper 43503, University Library of Munich, Germany.
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