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

  • 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.)

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.

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Article provided by Department of Economics, The Lahore School of Economics in its journal Lahore Journal of Economics.

Volume (Year): 18 (2013)
Issue (Month): 2 (July-Dec)
Pages: 51-63

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Handle: RePEc:lje:journl:v:18:y:2013:i:2:p:51-63
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  16. Joshua D. Angrist & Alan B. Krueger, 1990. "Does Compulsory School Attendance Affect Schooling and Earnings?," NBER Working Papers 3572, National Bureau of Economic Research, Inc.
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  19. Tansel, A., 1992. "Wage Employment, Earnings and Returns to Schooling for Men and Women in Turkey," Papers 661, Yale - Economic Growth Center.
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  23. Trostel, Philip & Walker, Ian & Woolley, Paul, 2002. "Estimates of the economic return to schooling for 28 countries," Labour Economics, Elsevier, vol. 9(1), pages 1-16, February.
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  25. Barry R. Chiswick, 1983. "The Earnings and Human Capital of American Jews," Journal of Human Resources, University of Wisconsin Press, vol. 18(3), pages 313-336.
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