Are Returns to Schooling Concentrated Among The Most Able? A Semiparametric Analysis of The Ability--earnings Relationships
In this paper I explore the relationship between ability and log waves using flexible estimation techniques. I find evidence of nonlinearities in these relationships that vary across levels of schooling, and argue that ability--sorting into higher education creates problems for accurately identifying the return to schooling over the entire ability support. Over an ability support that is "common" to those with and without a college education, I find that the college log wage premium is incerasing for the more able, and this premium grew during the period 1984--1994 for individuals at all points in the ability distribution. The growth of this wage premium over time also appears to have followed a "smoother" linear path for high--ability individuals than individuals of lower ability. Copyright Blackwell Publishing Ltd, 2003.
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Volume (Year): 65 (2003)
Issue (Month): 1 (February)
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