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Changing Returns to Education in Portugal during the 1980s and Early 1990s: OLS and quantile regression estimators

Listed author(s):
  • Joop Hartog

    ()

    (University of Amsterdam)

  • Pedro T. Pereira

    (Universidade Nova de Lisboa)

  • José A.C. Vieira

    ()

    (Universidade dos Azores)

This paper examines the evolution of the returns to education in Portugal over the 1980s andearly 1990s. The main findings indicate that the returns to education have increased,particularly after joining the European Union in 1986. Since this occurred along with anincrease in the level of education within the labour force, the process is most likely demanddriven. The results also indicate that modelling on average (i.e. OLS) misses importantfeatures of the wage structure. Quantile regression (QR) analysis reveals that the effect ofeducation is not constant across the conditional wage distribution. They are higher for thoseat higher quantiles in the conditional wage distribution. Wage inequality expanded inPortugal over the 1980s and the returns to education had an important role in this process.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 99-002/3.

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Date of creation: 21 Jan 1999
Handle: RePEc:tin:wpaper:19990002
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  1. George Psacharopoulos, 1985. "Returns to Education: A Further International Update and Implications," Journal of Human Resources, University of Wisconsin Press, vol. 20(4), pages 583-604.
  2. Duncan, Greg J. & Hoffman, Saul D., 1981. "The incidence and wage effects of overeducation," Economics of Education Review, Elsevier, vol. 1(1), pages 75-86, February.
  3. Alfonso Alba-Ramírez, 1993. "Mismatch in the Spanish Labor Market: Overeducation?," Journal of Human Resources, University of Wisconsin Press, vol. 28(2), pages 259-278.
  4. David Card, 1994. "Earnings, Schooling, and Ability Revisited," Working Papers 710, Princeton University, Department of Economics, Industrial Relations Section..
  5. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters,in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  6. David Card, 1994. "Earnings, Schooling, and Ability Revisited," Working Papers 710, Princeton University, Department of Economics, Industrial Relations Section..
  7. Courakis, Anthony S, 1991. "Labour Skills and Human Capital in the Explanation of Trade Patterns," Oxford Economic Papers, Oxford University Press, vol. 43(3), pages 443-462, July.
  8. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, Enero-Jun.
  9. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
  10. Hartog, Joop & Oosterbeek, Hessel, 1988. "Education, allocation and earnings in the Netherlands: 0verschooling?," Economics of Education Review, Elsevier, vol. 7(2), pages 185-194, April.
  11. Buchinsky, Moshe, 1994. "Changes in the U.S. Wage Structure 1963-1987: Application of Quantile Regression," Econometrica, Econometric Society, vol. 62(2), pages 405-458, March.
  12. Bernd Fitzenberger & Claudia Kurz, 2003. "New insights on earnings trends across skill groups and industries in West Germany," Empirical Economics, Springer, vol. 28(3), pages 479-514, July.
  13. Koenker, Roger & Bassett, Gilbert, Jr, 1982. "Robust Tests for Heteroscedasticity Based on Regression Quantiles," Econometrica, Econometric Society, vol. 50(1), pages 43-61, January.
  14. Hartog, Joop, 1986. "Allocation and the Earnings Function," Empirical Economics, Springer, vol. 11(2), pages 97-110.
  15. Buchinsky, Moshe, 1995. "Quantile regression, Box-Cox transformation model, and the U.S. wage structure, 1963-1987," Journal of Econometrics, Elsevier, vol. 65(1), pages 109-154, January.
  16. Sicherman, Nachum, 1991. ""Overeducation" in the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 9(2), pages 101-122, April.
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