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Heterogeneity in schooling rates of return

  • Henderson, Daniel J.
  • Polachek, Solomon W.
  • Wang, Le

This paper relaxes the assumption of homogeneous rates of return to schooling by employing nonparametric kernel regression. This approach allows us to examine the differences in rates of return to education both across and within groups. Similar to previous studies we find that on average blacks have higher returns to education than whites, natives have higher returns than immigrants and younger workers have higher returns than older workers. Contrary to previous studies we find that the average gap of the rate of return between white and black workers is larger than previously thought and the gap is smaller between immigrants and natives. We also uncover significant heterogeneity, the extent of which differs both across and within groups. Finally, we uncover the characteristics common amongst those with the smallest and largest returns to education.

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File URL: http://www.sciencedirect.com/science/article/pii/S0272775711000720
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Article provided by Elsevier in its journal Economics of Education Review.

Volume (Year): 30 (2011)
Issue (Month): 6 ()
Pages: 1202-1214

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Handle: RePEc:eee:ecoedu:v:30:y:2011:i:6:p:1202-1214
DOI: 10.1016/j.econedurev.2011.05.002
Contact details of provider: Web page: http://www.elsevier.com/locate/econedurev

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  1. Ammermueller, Andreas & Kuckulenz, Anja & Zwick, Thomas, 2009. "Aggregate unemployment decreases individual returns to education," Economics of Education Review, Elsevier, vol. 28(2), pages 217-226, April.
  2. Henderson, Daniel J. & Polachek, Solomon W. & Wang, Le, 2011. "Heterogeneity in schooling rates of return," Economics of Education Review, Elsevier, vol. 30(6), pages 1202-1214.
  3. Colm Harmon & Vincent (Vincent Peter) Hogan & Ian Walker, 2002. "Dispersion in the economic return to schooling," Open Access publications 10197/1101, School of Economics, University College Dublin.
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  18. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-75, March.
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