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Return to college education revisited: Is relevance relevant?

  • Yakusheva, Olga
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    This study examines whether the size of the college earnings premium varies depending on the quality of the match between an individual's degree field and his/her occupation. The study uses the Occupational Information Network (O*NET) to obtain a new measure of the quality of occupational match for a sample of 2268 young adults with post-secondary degrees from the restricted use High School and Beyond (1980/92) data. The study finds that people whose occupations better match their degree fields earn significantly higher returns to post-secondary schooling. This result is robust to controlling for an extensive set of pre-existing differences among individuals, and to accounting for differences in earnings across post-secondary degree fields.

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    File URL: http://www.sciencedirect.com/science/article/B6VB9-509W7CD-1/2/7879326e872db55ea9808788f5f2b652
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    Article provided by Elsevier in its journal Economics of Education Review.

    Volume (Year): 29 (2010)
    Issue (Month): 6 (December)
    Pages: 1125-1142

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    Handle: RePEc:eee:ecoedu:v:29:y:2010:i:6:p:1125-1142
    Contact details of provider: Web page: http://www.elsevier.com/locate/econedurev

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    1. Jacob A. Mincer, 1974. "The Human Capital Earnings Function," NBER Chapters, in: Schooling, Experience, and Earnings, pages 83-96 National Bureau of Economic Research, Inc.
    2. Miller, Robert A, 1984. "Job Matching and Occupational Choice," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 1086-120, December.
    3. Omar Arias & Walter Sosa-Escudero & Kevin F. Hallock, 2001. "Individual heterogeneity in the returns to schooling: instrumental variables quantile regression using twins data," Empirical Economics, Springer, vol. 26(1), pages 7-40.
    4. Jaeger, David A & Page, Marianne E, 1996. "Degrees Matter: New Evidence on Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 733-40, November.
    5. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
    6. Sicherman, Nachum, 1991. ""Overeducation" in the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 9(2), pages 101-22, April.
    7. Hungerford, Thomas & Solon, Gary, 1987. "Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 175-77, February.
    8. Clifford Clogg & James Shockey, 1984. "Mismatch between occupation and schooling: A prevalence measure, recent trends and demographic analysis," Demography, Springer, vol. 21(2), pages 235-257, May.
    9. Russell W. Rumberger, 1987. "The Impact of Surplus Schooling on Productivity and Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 22(1), pages 24-50.
    10. Marco Manacorda & Barbara Petrongolo, 1996. "Skill Mismatch and Unemployment in OECD Countries," CEP Discussion Papers dp0307, Centre for Economic Performance, LSE.
    11. Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August.
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