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In-School Work Experience and the Returns to Schooling

  • Light, Audrey

Students often accumulate substantial work experience before leaving school. Because conventional earnings functions do not control for in-school work experience, their estimates of the return to schooling include the benefit of work experience gained along the way. Using data from the National Longitudinal Survey of Youth, I estimate wage models with and without controls for in-school work experience. The estimated schooling coefficients are 25%-44% higher (depending on how I control for ability bias) when in-school work experience is omitted than when it is included. These findings indicate that conventional models significantly overstate the wage effects of "school only." Copyright 2001 by University of Chicago Press.

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File URL: http://dx.doi.org/10.1086/209980
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Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 19 (2001)
Issue (Month): 1 (January)
Pages: 65-93

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Handle: RePEc:ucp:jlabec:v:19:y:2001:i:1:p:65-93
Contact details of provider: Web page: http://www.journals.uchicago.edu/JOLE/

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  1. J. A. Hausman, 1976. "Specification Tests in Econometrics," Working papers 185, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Kristin F. Butcher & Anne Case, 1994. "The Effect of Sibling Sex Composition on Women's Education and Earnings," The Quarterly Journal of Economics, Oxford University Press, vol. 109(3), pages 531-563.
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  6. Lam, David & Schoeni, Robert F, 1993. "Effects of Family Background on Earnings and Returns to Schooling: Evidence from Brazil," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 710-40, August.
  7. Blackburn, McKinley L & Neumark, David, 1993. "Omitted-Ability Bias and the Increase in the Return to Schooling," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 521-44, July.
  8. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
  9. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352.
  10. Griliches, Zvi & Mason, William M, 1972. "Education, Income, and Ability," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages S74-S103, Part II, .
  11. Michael, Robert T & Tuma, Nancy Brandon, 1984. "Youth Employment: Does Life Begin at 16?," Journal of Labor Economics, University of Chicago Press, vol. 2(4), pages 464-76, October.
  12. Light, Audrey, 1998. "Estimating Returns to Schooling: When Does the Career Begin?," Economics of Education Review, Elsevier, vol. 17(1), pages 31-45, February.
  13. Haley, William J, 1973. "Human Capital: The Choice Between Investment and Income," American Economic Review, American Economic Association, vol. 63(5), pages 929-44, December.
  14. Parsons, Donald O, 1974. "The Cost of School Time, Foregone Earnings, and Human Capital Formation," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 251-66, Part I, M.
  15. Giora Hanoch, 1967. "An Economic Analysis of Earnings and Schooling," Journal of Human Resources, University of Wisconsin Press, vol. 2(3), pages 310-329.
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