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The Effect of College Curriculum on Earnings: Accounting for Non-Ignorable Non-Response Bias

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  • Daniel S. Hamermesh
  • Stephen G. Donald

Abstract

We link information on the current earnings of college graduates from many cohorts to their high-school records, their detailed college records and their demographics to infer the impact of college major on earnings. We develop an estimator to handle the potential for non-response bias and identify non-response using an affinity measure -- the potential respondent's link to the organization conducting the survey. This technique is generally applicable for adjusting for unit non-response. In the model describing earnings, estimated using the identified (for non-response bias) selectivity adjustments, adjusted earnings differentials across college majors are less than half as large as unadjusted differentials and ten percent smaller than those that do not account for selective non-response.

Suggested Citation

  • Daniel S. Hamermesh & Stephen G. Donald, 2004. "The Effect of College Curriculum on Earnings: Accounting for Non-Ignorable Non-Response Bias," NBER Working Papers 10809, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:10809
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    References listed on IDEAS

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    1. Reuben Gronau, 1973. "Wage Comparisons -A Selectivity Bias," NBER Working Papers 0013, National Bureau of Economic Research, Inc.
    2. Olsen, Randall J, 1980. "A Least Squares Correction for Selectivity Bias," Econometrica, Econometric Society, vol. 48(7), pages 1815-1820, November.
    3. Joseph G. Altonji, 1995. "The Effects of High School Curriculum on Education and Labor Market Outcomes," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 409-438.
    4. Francis Vella, 1998. "Estimating Models with Sample Selection Bias: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 127-169.
    5. Linda Datcher Loury, 1997. "The Gender Earnings Gap among College-Educated Workers," ILR Review, Cornell University, ILR School, vol. 50(4), pages 580-593, July.
    6. Arcidiacono, Peter, 2004. "Ability sorting and the returns to college major," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 343-375.
    7. Wise, David A, 1975. "Academic Achievement and Job Performance," American Economic Review, American Economic Association, vol. 65(3), pages 350-366, June.
    8. Tomas Philipson, 1997. "Data Markets and the Production of Surveys," Review of Economic Studies, Oxford University Press, vol. 64(1), pages 47-72.
    9. Lois Joy, 2003. "Salaries of Recent Male and Female College Graduates: Educational and Labor Market Effects," ILR Review, Cornell University, ILR School, vol. 56(4), pages 606-621, July.
    10. Mitali Das & Whitney K. Newey & Francis Vella, 2003. "Nonparametric Estimation of Sample Selection Models," Review of Economic Studies, Oxford University Press, vol. 70(1), pages 33-58.
    11. Jeff Grogger & Eric Eide, 1995. "Changes in College Skills and the Rise in the College Wage Premium," Journal of Human Resources, University of Wisconsin Press, vol. 30(2), pages 280-310.
    12. Ahn, Hyungtaik & Powell, James L., 1993. "Semiparametric estimation of censored selection models with a nonparametric selection mechanism," Journal of Econometrics, Elsevier, vol. 58(1-2), pages 3-29, July.
    13. Biddle, Jeff E & Zarkin, Gary A, 1989. "Choice among Wage-Hours Packages: An Empirical Investigation of Male Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 415-437, October.
    14. Evangelos M. Falaris & H. Elizabeth Peters, 1998. "Survey Attrition and Schooling Choices," Journal of Human Resources, University of Wisconsin Press, vol. 33(2), pages 531-554.
    15. Sarah E. Turner & William G. Bowen, 1999. "Choice of Major: The Changing (Unchanging) Gender Gap," ILR Review, Cornell University, ILR School, vol. 52(2), pages 289-313, January.
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    Cited by:

    1. Johansson, Fredrik, 2007. "How to Adjust for Nonignorable Nonresponse: Calibration, Heckit or FIML?," Working Paper Series 2007:22, Uppsala University, Department of Economics.
    2. Usamah Fayez Al-Farhan, 2010. "Changes in the Gender Wage Gap in Germany during a Period of Rising Wage Inequality 1999-2006: Was it Discrimination in the Returns to Human Capital?," SOEPpapers on Multidisciplinary Panel Data Research 293, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. Cornwell, Christopher & Lee, Kyung Hee & Mustard, David B., 2006. "The Effects of State-Sponsored Merit Scholarships on Course Selection and Major Choice in College," IZA Discussion Papers 1953, Institute for the Study of Labor (IZA).
    4. Daniel S. Hamermesh, 2006. "The Value of Peripatetic Economists: A Sesqui-Difference Evaluation of Bob Gregory," The Economic Record, The Economic Society of Australia, vol. 82(257), pages 138-149, June.
    5. Yosef Bonaparte & Frank Fabozzi, 2011. "Savings selectivity bias, subjective expectations and stock market participation," Applied Financial Economics, Taylor & Francis Journals, vol. 21(3), pages 119-130.
    6. Eric Bettinger, 2010. "To Be or Not to Be: Major Choices in Budding Scientists," NBER Chapters,in: American Universities in a Global Market, pages 69-98 National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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