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Economic Returns to Education in France: OLS and Instrumental Variable Estimations

Author

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  • Sajjad Haider Bhatti

    () (Institut de Recherche sur l’Éducation: Sociologie et Économie de l’Éducation (IREDU), Université de Bourgogne, Dijon, France.)

  • Jean Bourdon

    () (Directeur de recherche émérite au CNRS, Institut de Recherche sur l’Éducation: Sociologie et Économie de l’Éducation (IREDU), Université de Bourgogne, Dijon, France.)

  • Muhammad Aslam

    () (Assistant Professor, Department of Statistics , Bahauddin Zakariya University, Multan, Pakistan.)

Abstract

This article estimates the economic returns to schooling as well as analyzing other explanatory factors for the French labor market. It addresses the issue of endogeneity bias and proposes two new instruments for use in the instrumental variable two-stage least squares technique. Our results show that the proposed instruments are relevant and adequate, based on evidence from the available literature. After using the proposed instruments, we find that the OLS coefficients for schooling are biased downwards. Finally, we choose between the two proposed instruments.

Suggested Citation

  • Sajjad Haider Bhatti & Jean Bourdon & Muhammad Aslam, 2013. "Economic Returns to Education in France: OLS and Instrumental Variable Estimations," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 18(2), pages 51-63, July-Dec.
  • Handle: RePEc:lje:journl:v:18:y:2013:i:2:p:51-63
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    References listed on IDEAS

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    2. Tansel, Aysit, 1994. "Wage employment, earnings and returns to schooling for men and women in Turkey," Economics of Education Review, Elsevier, vol. 13(4), pages 305-320.
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    1. repec:pid:journl:v:55:y:2016:i:4:p:837-851 is not listed on IDEAS

    More about this item

    Keywords

    Endogeneity bias; instrumental variable; Mincerian model; two-stage least squares; wage regression; France.;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • I2 - Health, Education, and Welfare - - Education
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • P5 - Economic Systems - - Comparative Economic Systems

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