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Increasing Returns to Schooling by Ability? A Comparison between the USA and Sweden

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  • Martin Nordin
  • Dan-Olof Rooth

Abstract

type="main"> This study uses US survey data and Swedish register data to estimate and compare the relationship between returns to schooling and ability. A significant and positive relationship is found for Sweden, but not for the USA. Based on the predictions of the optimal schooling model it is argues that measured differences in the relationship between returns to schooling and ability could depend upon on differences in the schooling systems between the countries. The findings suggest that a low price of higher education in Sweden makes a relationship between returns to schooling and ability observable in Sweden but not in the USA.

Suggested Citation

  • Martin Nordin & Dan-Olof Rooth, 2014. "Increasing Returns to Schooling by Ability? A Comparison between the USA and Sweden," Manchester School, University of Manchester, vol. 82, pages 1-20, December.
  • Handle: RePEc:bla:manchs:v:82:y:2014:i::p:1-20
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    File URL: http://hdl.handle.net/10.1111/manc.12038
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    References listed on IDEAS

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    1. Hansen, Karsten T. & Heckman, James J. & Mullen, K.J.Kathleen J., 2004. "The effect of schooling and ability on achievement test scores," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 39-98.
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    Cited by:

    1. Juan F. Castro & Gustavo Yamada, 2012. "“Convexification” and “deconvexification” of the peruvian wage profile: a tale of declining education quality," Working Papers 12-02, Centro de Investigación, Universidad del Pacífico.

    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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