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Marginal College Wage Premiums Under Selection Into Employment

Author

Listed:
  • Matthias Westphal
  • Daniel A Kamhöfer
  • Hendrik Schmitz

Abstract

We identify female long-term wage returns to college education using the educational expansion between 1960–90 in West Germany as exogenous variation for college enrolment. We estimate marginal treatment effects and propose a simple partial identification technique accounting for women selecting into employment due to having a college education. College-educated women are, on average, more than 18 percentage points more likely to be employed due to having a college education than those without college education. Taking this into account, we bound wage returns to 5.7%–13.9% per year of education completed (average treatment effects on the treated).

Suggested Citation

  • Matthias Westphal & Daniel A Kamhöfer & Hendrik Schmitz, 2022. "Marginal College Wage Premiums Under Selection Into Employment," The Economic Journal, Royal Economic Society, vol. 132(646), pages 2231-2272.
    • Handle: RePEc:oup:econjl:v:132:y:2022:i:646:p:2231-2272.
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    File URL: http://hdl.handle.net/10.1093/ej/ueac021
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    Citations

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    Cited by:

    1. Mogstad, Magne & Torgovitsky, Alexander, 2024. "Instrumental variables with unobserved heterogeneity in treatment effects," Handbook of Labor Economics,, Elsevier.
    2. Eric Schuss, 2025. "The Effects of Expanding Higher Education on Wages and Employment in German Establishments," Economics of Education Working Paper Series 0239, University of Zurich, Department of Business Administration (IBW).
    3. Jessica Ordemann & Friedhelm Pfeiffer, 2022. "The evolution of educational wage differentials for women and men in Germany, from 1996 to 2019," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 56(1), pages 1-12, December.
    4. Lu, Xiaomeng & He, Zehui & Li, Yaling & Luo, Ronghua, 2025. "Post-compulsory education of children and household asset allocation," Pacific-Basin Finance Journal, Elsevier, vol. 89(C).
    5. Krumme, Anna & Westphal, Matthias, 2024. "Monetary returns to upper secondary schooling, the evolution of unobserved heterogeneity, and implications for employer learning," Ruhr Economic Papers 1130, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    6. Laura Schmitz, 2022. "Heterogeneous Effects of After-School Care on Child Development," Discussion Papers of DIW Berlin 2006, DIW Berlin, German Institute for Economic Research.
    7. Tianyu Jin & Huiqin Liu, 2023. "The Heterogeneous Effect of Post-Compulsory Education on Subjective Well-Being: Evidence Based on Marginal Treatment Effect," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 18(6), pages 2851-2876, December.
    8. Zhewen Pan & Zhengxin Wang & Junsen Zhang & Yahong Zhou, 2024. "Marginal treatment effects in the absence of instrumental variables," Papers 2401.17595, arXiv.org, revised Aug 2024.
    9. Paolo, Antonio Di & Shidiqi, Khalifany-Ash, 2025. "Education and ethnic intermarriage: evidence from higher education expansion in Indonesia," World Development, Elsevier, vol. 195(C).
    10. Antonio Di Paolo & Khalifany Ash Shidiqi, 2024. "Education and Ethnic Intermarriage: Evidence from Higher Education Expansion in Indonesia," IREA Working Papers 202409, University of Barcelona, Research Institute of Applied Economics, revised Feb 2024.
    11. Antonio Di Paolo & Khalifany-Ash Shidiqi, 2024. "“Education and Ethnic Intermarriage: Evidence from Higher Education Expansion in Indonesia”," AQR Working Papers 202403, University of Barcelona, Regional Quantitative Analysis Group, revised May 2024.
    12. Ghazala Azmat & Jack Britton, 2024. "Labour Market Returns to Higher Education," Sciences Po Economics Publications (main) hal-04709561, HAL.

    More about this item

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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