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Why do women have a higher rate of return to schooling than men?

Author

Listed:
  • Yanan Chen

    (West Chester University)

  • Kyle A. Kelly

    (West Chester University)

Abstract

The rate of return to schooling is estimated higher for women than for men in most studies. Our explanation is the greater increase in expected lifetime work hours for women compared to men due to increased education. We compute the expected lifetime annual work hours, EXPHRS, by using a deterministic approach and include it in the wage equation. We find that EXPHRS positively affects hourly wages, and the effects are greater for women than for men. By controlling for the effects of EXPHRS, women have a slightly lower rate of return to schooling. It suggests the female-male differential in the rate of return to schooling can be explained by the gender difference in EXPHRS.

Suggested Citation

  • Yanan Chen & Kyle A. Kelly, 2023. "Why do women have a higher rate of return to schooling than men?," Economics Bulletin, AccessEcon, vol. 43(1), pages 564-573.
    • Handle: RePEc:ebl:ecbull:eb-22-00442
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Rate of return to schooling; Expected lifetime work hours; Labor force participation; Gender difference; Mincer earnings equation;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • I2 - Health, Education, and Welfare - - Education

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