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A Test of the Sorting Model of Education in Australia

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Author Info
Paul W. Miller (UWA Business School, The University of Western Australia)
Charles Mulvey (UWA Business School, The University of Western Australia)
Nick Martin (Queensland Institute of Medical Research)

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Abstract

In this paper we test the hypothesis advanced by Weiss (1995) that under sorting models the return to schooling across identical twins would decline over time compared to the return for the population as a whole. The analyses undertaken on a relatively large sample of Australian twins are consistent with this proposition. The pure effect of education on earnings declines with time in the labour market. This presumably occurs because with time in the labour market firms learn more about the workers and so can set pay assigning more weight to the information they acquire.

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File URL: http://www.biz.uwa.edu.au/home/research/discussionworking_papers/economics/2004?f=151002
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Publisher Info
Paper provided by The University of Western Australia, Department of Economics in its series Economics Discussion / Working Papers with number 04-12.

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Length: 23 pages
Date of creation: 2004
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Handle: RePEc:uwa:wpaper:04-12

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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. McNabb, Robert & Richardson, Sue, 1989. "Earnings, Education and Experience: Is Australia Different?," Australian Economic Papers, Blackwell Publishing, vol. 28(52), pages 57-75, June.
  2. Arabsheibani, G. Reza & Rees, Hedley, 1998. "On the Weak vs Strong Version of the Screening Hypothesis: A Re-Examination of the P-Test for the U.K," Economics of Education Review, Elsevier, vol. 17(2), pages 189-192, April. [Downloadable!] (restricted)
  3. Katz, Eliakim & Ziderman, Adrian, 1980. "On education, screening and human capital," Economics Letters, Elsevier, vol. 6(1), pages 81-88. [Downloadable!] (restricted)
  4. McDonald, J.T. & Worswick, C., 1999. "Immigrant Assimilation in a Regulated Labour Market: unemployment of Immigrant Men in Australia," Papers 1999-03, Tasmania - Department of Economics.
  5. Miller, Paul & Mulvey, Charles & Martin, Nick, 1996. "Multiple Regression Analysis of the Occupational Status of Twins: A Comparison of Economic and Behavioural Genetics Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(2), pages 227-39, May.
  6. Psacharopoulos, George, 1979. "On the weak versus the strong version of the screening hypothesis," Economics Letters, Elsevier, vol. 4(2), pages 181-185. [Downloadable!] (restricted)
  7. Riley, John G., 1975. "Competitive signalling," Journal of Economic Theory, Elsevier, vol. 10(2), pages 174-186, April. [Downloadable!] (restricted)
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  8. Miller, Paul & Mulvey, Charles & Martin, Nick, 2001. "Genetic and environmental contributions to educational attainment in Australia," Economics of Education Review, Elsevier, vol. 20(3), pages 211-224, June. [Downloadable!] (restricted)
  9. Brown, Sarah & Sessions, John G., 1999. "Education and employment status: a test of the strong screening hypothesis in Italy," Economics of Education Review, Elsevier, vol. 18(4), pages 397-404, October. [Downloadable!] (restricted)
  10. Miller, Paul & Mulvey, Charles & Martin, Nick, 2006. "The return to schooling: Estimates from a sample of young Australian twins," Labour Economics, Elsevier, vol. 13(5), pages 571-587, October. [Downloadable!] (restricted)
  11. Riley, John G, 1979. "Testing the Educational Screening Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages S227-52, October. [Downloadable!] (restricted)
  12. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, vol. 84(5), pages 1157-73, December. [Downloadable!] (restricted)
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  13. McDonald, James Ted & Worswick, Christopher, 1999. "The Earnings of Immigrant Men in Australia: Assimilation, Cohort Effects, and Macroeconomic Conditions," The Economic Record, The Economic Society of Australia, vol. 75(228), pages 49-62, March.
  14. Wolpin, Kenneth I, 1977. "Education and Screening," American Economic Review, American Economic Association, vol. 67(5), pages 949-58, December. [Downloadable!] (restricted)
  15. Miller, Paul & Mulvey, Charles & Martin, Nick, 1997. "Family Characteristics and the Returns to Schooling: Evidence on Gender Differences from a Sample of Australian Twins," Economica, London School of Economics and Political Science, vol. 64(253), pages 119-36, February. [Downloadable!] (restricted)
  16. Barry R. Chiswick & Yew Liang Lee & Paul W. Miller, 2003. "Schooling, Literacy, Numeracy and Labour Market Success," The Economic Record, The Economic Society of Australia, vol. 79(245), pages 165-181, 06. [Downloadable!] (restricted)
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  17. Miller, Paul W & Mulvey, Charles & Martin, Nick, 1995. "What Do Twins Studies Reveal about the Economic Returns to Education? A Comparison of Australian and U.S. Findings," American Economic Review, American Economic Association, vol. 85(3), pages 586-99, June. [Downloadable!] (restricted)
  18. Cohn, Elchanan & Kiker, B. F. & De Oliveira, M. Mendes, 1987. "Further evidence on the screening hypothesis," Economics Letters, Elsevier, vol. 25(3), pages 289-294. [Downloadable!] (restricted)
  19. Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August. [Downloadable!] (restricted)
  20. Preston, Alison, 1997. "Where Are We Now with Human Capital Theory in Australia?," The Economic Record, The Economic Society of Australia, vol. 73(220), pages 51-78, March.
  21. Alba-Ramirez, Alfonso & San Segundo, Maria Jesus, 1995. "The returns to education in Spain," Economics of Education Review, Elsevier, vol. 14(2), pages 155-166, June. [Downloadable!] (restricted)
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Cited by:
(explanations, 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. Stephan O. Hornig & Horst Rottmann & Rüdiger Wapler, 2009. "Information Asymmetry, Education Signals and the Case of Ethnic and Native Germans," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  2. Uschi Backes-Gellner & Stephan Veen, 2006. "Incentives for Schools, Educational Signals and Labour Market Outcomes," Working Papers 0061, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Jun 2006. [Downloadable!]
    Other versions:
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