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A test of the sorting model of education in Australia

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  • Miller, Paul W.
  • Mulvey, Charles
  • Martin, Nick

Abstract

In this paper we test the hypothesis advanced by Weiss (1995) that under sorting models the return to schooling across identical twins would decline over time compared to the return for the population as a whole. The analyses undertaken on a relatively large sample of Australian twins are consistent with this proposition. The pure effect of education on earnings declines with time in the labour market. This presumably occurs because with time in the labour market firms learn more about the workers and so can set pay assigning more weight to the information they acquire.
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  • Miller, Paul W. & Mulvey, Charles & Martin, Nick, 2004. "A test of the sorting model of education in Australia," Economics of Education Review, Elsevier, vol. 23(5), pages 473-482, October.
  • Handle: RePEc:eee:ecoedu:v:23:y:2004:i:5:p:473-482
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    1. Miller, Paul & Mulvey, Charles & Martin, Nick, 1996. "Multiple Regression Analysis of the Occupational Status of Twins: A Comparison of Economic and Behavioural Genetics Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(2), pages 227-239, May.
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    5. Miller, Paul W & Mulvey, Charles & Martin, Nick, 1995. "What Do Twins Studies Reveal about the Economic Returns to Education? A Comparison of Australian and U.S. Findings," American Economic Review, American Economic Association, pages 586-599.
    6. Orley Ashenfelter & Cecilia Rouse, 1998. "Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins," The Quarterly Journal of Economics, Oxford University Press, pages 253-284.
    7. Riley, John G, 1979. "Testing the Educational Screening Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 227-252, October.
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    9. Joseph G. Altonji, 1995. "The Effects of High School Curriculum on Education and Labor Market Outcomes," Journal of Human Resources, University of Wisconsin Press, pages 409-438.
    10. Miller, Paul & Mulvey, Charles & Martin, Nick, 1997. "Family Characteristics and the Returns to Schooling: Evidence on Gender Differences from a Sample of Australian Twins," Economica, London School of Economics and Political Science, vol. 64(253), pages 119-136, February.
    11. Cohn, Elchanan & Kiker, B. F. & De Oliveira, M. Mendes, 1987. "Further evidence on the screening hypothesis," Economics Letters, Elsevier, pages 289-294.
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    21. Grubb, W. Norton, 1993. "Further tests of screening on education and observed ability," Economics of Education Review, Elsevier, pages 125-136.
    22. Miller, Paul & Mulvey, Charles & Martin, Nick, 2006. "The return to schooling: Estimates from a sample of young Australian twins," Labour Economics, Elsevier, pages 571-587.
    23. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, pages 1157-1173.
    24. McDonald, James Ted & Worswick, Christopher, 1999. "The Earnings of Immigrant Men in Australia: Assimilation, Cohort Effects, and Macroeconomic Conditions," The Economic Record, The Economic Society of Australia, vol. 75(228), pages 49-62, March.
    25. Wolpin, Kenneth I, 1977. "Education and Screening," American Economic Review, American Economic Association, pages 949-958.
    26. Alba-Ramirez, Alfonso & San Segundo, Maria Jesus, 1995. "The returns to education in Spain," Economics of Education Review, Elsevier, pages 155-166.
    27. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, pages 1157-1173.
    28. Arabsheibani, G. Reza & Rees, Hedley, 1998. "On the Weak vs Strong Version of the Screening Hypothesis: A Re-Examination of the P-Test for the U.K," Economics of Education Review, Elsevier, pages 189-192.
    29. Psacharopoulos, George, 1979. "On the weak versus the strong version of the screening hypothesis," Economics Letters, Elsevier, pages 181-185.
    30. Orley Ashenfelter & Cecilia Rouse, 1998. "Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins," The Quarterly Journal of Economics, Oxford University Press, pages 253-284.
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    Cited by:

    1. Hornig, Stephan O. & Rottmann, Horst & Wapler, Rüdiger, 2011. "Sorting on the labour market: A literature overview and theoretical framework," Weidener Diskussionspapiere 27, University of Applied Sciences Amberg-Weiden (OTH).
    2. Hornig, Stephan O. & Rottmann, Horst & Wapler, Rüdiger, 2009. "Information asymmetry, education signals and the case of Ethnic and Native Germans," IAB Discussion Paper 200914, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Uschi Backes-Gellner & Stephan Veen, 2006. "Incentives for Schools, Educational Signals and Labour Market Outcomes," Economics of Education Working Paper Series 0009, University of Zurich, Department of Business Administration (IBW), revised Jun 2006.
    4. Miller, Paul & Mulvey, Charles & Martin, Nick, 2006. "The return to schooling: Estimates from a sample of young Australian twins," Labour Economics, Elsevier, pages 571-587.
    5. Hornig, Stephan O. & Rottmann, Horst & Wapler, Rüdiger, 2009. "Information asymmetry, education signals and the case of Ethnic and Native Germans," IAB Discussion Paper 200914, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    6. Oppedisano, Veruska, 2014. "Higher education expansion and unskilled labour market outcomes," Economics of Education Review, Elsevier, pages 205-220.

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