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Count Your Hours: Returns to Education in Poland

Author

Listed:
  • Myck, Michal

    () (Centre for Economic Analysis, CenEA)

  • Nicinska, Anna

    () (Warsaw University)

  • Morawski, Leszek

    () (Warsaw University)

Abstract

We show how significant may be the difference in the estimated returns to education in Poland conditional on the measure of wages used and the estimation approach applied. Combining information from two different Polish surveys from 2005 and taking advantage of the Polish microsimulation model (SIMPL) we demonstrate how different the results can be depending on whether we use net or gross, and monthly or hourly wages, and show how important selection correction is for the conclusion. While there are several papers examining the wage equation in Poland, so far none of them has provided a comprehensive analysis of the effects of using different methods and the issue of selection-correction in the estimation of the wage equation in Poland has not been examined in detail. Annual rates of return to university education for men vary from 6.7% to 9.7% and for women from 8.0% to 13.4% when we compare results using net monthly wages without correcting for labor market selection to those from a selection corrected specification using gross hourly wages. We also demonstrate that simple linear estimation performs relatively well for men in comparison to our preferred selection corrected estimation, while using family demographics as exclusion restrictions seems to be the "second best" in the case of the wage equation estimation for women.

Suggested Citation

  • Myck, Michal & Nicinska, Anna & Morawski, Leszek, 2009. "Count Your Hours: Returns to Education in Poland," IZA Discussion Papers 4332, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4332
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    References listed on IDEAS

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    Cited by:

    1. Aleksandra Majchrowska & Sylwia Roszkowska, 2013. "Czy wykształcenie i doświadczenie zawodowe mają znaczenie? Wyniki równania Mincera dla Polski," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 30, pages 235-253.
    2. Jacek Liwiński & Emilia Bedyk, 2016. "Does it pay to invest in the education of children?," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 47.
    3. Małgorzata Kłobuszewska & Magdalena Rokicka, 2016. "Do local characteristics matter? Secondary school track choice in Poland," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 45.
    4. Paweł Strzelecki & Joanna Tyrowicz, 2015. "Inferring the Adequacy of Wage Expectations Among the Non-Working," Gospodarka Narodowa, Warsaw School of Economics, issue 6, pages 51-69.
    5. Leszek Wincenciak, 2015. "Was It All Worth It? On the Value of Tertiary Education for Generation ’77 in Poland," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 42.
    6. Emilia Bedyk & Jacek Liwiński, 2016. "The wage premium from parents’ investments in the education of their children in Poland," Working Papers 2016-14, Faculty of Economic Sciences, University of Warsaw.

    More about this item

    Keywords

    returns to education; wage equation; selection models; instrumental variables;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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