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Estimating the Economic Return to Schooling on the Basis of Panel Data

Listed author(s):
  • Kalwij, A.S.

    (Tilburg University, Center For Economic Research)

This paper is concerned with estimating the economic return to schooling of men in the Netherlands.We adopt an IV approach to estimate a panel data model with random individual effects.We exploit the fact that older individuals have relatively less schooling compared to younger individuals to construct instruments and include GNP per worker at the time an individual tumed 16 to control for birth-cohort effects.The estimated return to schooling is about 15%. Ignoring the endogencity of schooling results in a lower return to schooling. Ignoring birth-cohort effects results in a lower return to work experience.

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File URL: https://pure.uvt.nl/portal/files/524570/55.pdf
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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 1996-55.

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Date of creation: 1996
Handle: RePEc:tiu:tiucen:e9ee1abf-081f-48fc-8525-970de1970498
Contact details of provider: Web page: http://center.uvt.nl

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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. Colm Harmon & Ian Walker, 1996. "The Marginal and Average Returns to Schooling"," Working Papers 96/20, University College Dublin, Economics Department.
  3. Hausman, Jerry A & Taylor, William E, 1981. "Panel Data and Unobservable Individual Effects," Econometrica, Econometric Society, vol. 49(6), pages 1377-1398, November.
  4. Colm Harmon; & Ian Walker, 1995. "Estimates of Economic Return to Schooling in the UK," Economics, Finance and Accounting Department Working Paper Series n540195, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  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. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 38(2), pages 112-134.
  7. David Card, 1993. "Using Geographic Variation in College Proximity to Estimate the Return to Schooling," Working Papers 696, Princeton University, Department of Economics, Industrial Relations Section..
  8. Bekker, Paul A, 1994. "Alternative Approximations to the Distributions of Instrumental Variable Estimators," Econometrica, Econometric Society, vol. 62(3), pages 657-681, May.
  9. Harmon, Colm & Walker, Ian, 1995. "Estimates of the Economic Return to Schooling for the United Kingdom," American Economic Review, American Economic Association, vol. 85(5), pages 1278-1286, December.
  10. repec:fth:prinin:317 is not listed on IDEAS
  11. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, June.
  12. Magnus, J.R., 1978. "Maximum likelihood estimation of the GLS model with unknown parameters in the disturbance covariance matrix," Other publications TiSEM 388c2c25-0925-4b56-834a-7, Tilburg University, School of Economics and Management.
  13. David Card, 1993. "Using Geographic Variation in College Proximity to Estimate the Return to Schooling," Working Papers 696, Princeton University, Department of Economics, Industrial Relations Section..
  14. Zvi Griliches, 1957. "Specification Bias in Estimates of Production Functions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 39(1), pages 8-20.
  15. Magnus, Jan R., 1978. "Maximum likelihood estimation of the GLS model with unknown parameters in the disturbance covariance matrix," Journal of Econometrics, Elsevier, vol. 7(3), pages 281-312, April.
  16. Joshua D. Angrist & Alan B. Keueger, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 979-1014.
  17. Harmon, Harmon & Ian Walker, 1995. "Estimates of the economic return to schooling for the UK," IFS Working Papers W95/12, Institute for Fiscal Studies.
  18. harmon, C. & Walker, I., 1996. "The Marginal about Average Returns to Schooling," Papers 96/20, College Dublin, Department of Political Economy-.
  19. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
  20. Lusardi, Annamaria, 1996. "Permanent Income, Current Income, and Consumption: Evidence from Two Panel Data Sets," Journal of Business & Economic Statistics, American Statistical Association, vol. 14(1), pages 81-90, January.
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