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Educational Choice, Initial Wage and Wage Growth

Author

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  • Jacopo Mazza

    (University of Essex)

  • Hans van Ophem

    (University of Amsterdam)

Abstract

We investigate the major choice of college graduates where we make choice dependent on expected initial wages and expected wage growth per major. We build a model that allows us to estimate these factors semiparametrically and that corrects for selection bias. We estimate the model on the combined NLSY79 and NLSY97 samples. We find markedly different results in expected real wage growth and expected initial wages across majors. Furthermore, the dierences in these expectations appear to be relevant for major choice.

Suggested Citation

  • Jacopo Mazza & Hans van Ophem, 2020. "Educational Choice, Initial Wage and Wage Growth," Tinbergen Institute Discussion Papers 20-030/III, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20200030
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    References listed on IDEAS

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    More about this item

    Keywords

    Wage inequality; Wage uncertainty; Unobserved heterogeneity; Selection bias; Decision-making under Risk and Uncertainty; Semiparametric estimation;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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