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Changing Returns to Education During a Boom? The Case of Ireland

  • Seamus McGuinness
  • Frances McGinnity
  • Philip J. O'Connell

Ireland experienced dramatic growth in the economy and employment in the second half of the 1990s. This paper examines the consequences of that boom for returns to education and wage inequality using data from the Living in Ireland Survey for the years 1994, 1997, and 2001. Rapid economic growth is often expected to lead to increased returns to education and thus to rising wage inequality. We find fairly stable returns to education and falling wage inequality for men throughout the period, partly due to strong demand for unskilled labour, which helped maintain low-skilled wages. For women the wage premium for a university degree fell between 1997 and 2001, as did wage inequality. We argue that for women, low-skilled wages may have been kept up by the introduction of the minimum wage in 2000, and high-skilled wages fell due to a rapid rise in the supply of highly qualified women. Copyright 2009 The Authors. Journal compilation 2009 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd..

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9914.2008.00437.x
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Article provided by CEIS in its journal LABOUR.

Volume (Year): 23 (2009)
Issue (Month): s1 (03)
Pages: 197-221

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Handle: RePEc:bla:labour:v:23:y:2009:i:s1:p:197-221
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  1. Heckman, James J. & Lochner, Lance John & Todd, Petra E., 2003. "Fifty Years of Mincer Earnings Regressions," IZA Discussion Papers 775, Institute for the Study of Labor (IZA).
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  9. Helen Russell & Philip J. O’Connell, 2004. "Women Returning to Employment, Education and Training in Ireland - An Analysis of Transitions," The Economic and Social Review, Economic and Social Studies, vol. 35(1), pages 1-25.
  10. Colm Harmon & Hessel Oosterbeek & Ian Walker, 2003. "The Returns to Education: Microeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 115-156, 04.
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