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Ability Bias, Skewness and the College Wage Premium

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Author Info
Naylor, Robin A. (Department of Economics, University of Warwick)
Smith, Jeremy (Department of Economics, University of Warwick)

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Abstract

Changes in educational participation rates across cohorts are likely to imply changes in the ability-education relationship and thereby to impact on estimated returns to education. We show that skewness in the underlying ability distribution is a key determinant of the impact of graduate expansion on the college wage premium. Calibrating the model against the increased proportion of university students in Britain, we find that changes in the average ability gap between university students and others are likely to have mitigated demand-side forces.

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File URL: http://www2.warwick.ac.uk/fac/soc/economics/research/papers_2009/twerp_907.pdf
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Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 907.

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Date of creation: 2009
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Handle: RePEc:wrk:warwec:907

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Related research
Keywords: Ability Bias ; College Wage Premium ; Graduate Returns ; Cohort Effects;

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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
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information

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  1. Blackburn, McKinley L & Neumark, David, 1993. "Omitted-Ability Bias and the Increase in the Return to Schooling," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 521-44, July. [Downloadable!] (restricted)
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This page was last updated on 2009-11-3.

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