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Changing Returns to Education Across Cohorts: Selection, School System or Skills Obsolescence?

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Author Info
Torbjørn Hægeland () (Statistics Norway)

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Abstract

This paper investigates whether economic returns to education in Norway differ across cohorts. Differences in returns to education may arise from selection effects - the large increase in educational attainment in postwar years may have changed selection into education. They may also result from changes in the school system, having been transformed towards a more egalitarian system. Finally, cohort effects may arise from skills obsolescence - technological change may make old education less worth in the labor market. The empirical results suggest that there has been a decline in the returns to education across cohorts. Controlling for self-selection into education, however, the cohort differences vanish. There is no strong evidence in favor of the skills obsolescence explanation, and no support for the hypothesis that the quality of schooling has declined over time. Cohort differences in returns to education seem to have been driven by selection effects.

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Publisher Info
Paper provided by Research Department of Statistics Norway in its series Discussion Papers with number 302.

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Date of creation: Jun 2001
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Handle: RePEc:ssb:dispap:302

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Related research
Keywords: Returns to education; cohort effects; educational policy; self-selection.;

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Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

References listed on IDEAS
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  1. Costas Meghir & Mårten Palme, 1999. "Assessing the effect of schooling on earnings using a social experiment," IFS Working Papers W99/10, Institute for Fiscal Studies. [Downloadable!]
    Other versions:
  2. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages S76-S108, Part II, . [Downloadable!] (restricted)
    Other versions:
  3. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier. [Downloadable!] (restricted)
  4. Vella, Francis & Gregory, R. G., 1996. "Selection bias and human capital investment: Estimating the rates of return to education for young males," Labour Economics, Elsevier, vol. 3(2), pages 197-219, September. [Downloadable!] (restricted)
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