Schooling and Wage Revisited: Does Higher IQ Really Give You Higher Income?
AbstractTraditional studies of returns-to-schooling have been generally concerned with several issues like the omitted variable bias, error-in-measurement bias and the endogeneity of schooling. While such inquiries are of much empirical importance, this paper tries to ask a different but non-negligible question: what should be interpreted from the individual ability measure per se in the wage equation? With data from well documented national surveys in the U.S., this paper is able to make a simple but fundamental argument: IQ level per se, holding all other personal characteristics constant, has negligible net effect in determining one’s income level and thus should not be used as the proper measure of the ability we want to quantify in the wage-determining process, i.e., the very ability to earn income.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 23206.
Date of creation: 09 Jun 2010
Date of revision:
return to schooling; ability measure; insignificance of IQ; emotional intelligence;
Find related papers by JEL classification:
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-18 (All new papers)
- NEP-EDU-2010-06-18 (Education)
- NEP-LAB-2010-06-18 (Labour Economics)
- NEP-NEU-2010-06-18 (Neuroeconomics)
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