How different are returns to education? Evidence from German school choices
This study presents estimates of returns to post-secondary education and wage differentials among graduates fromdifferent secondary schools in Germany. I use an empirical model that captures the basic features of the German education system. It controls for selection into post-secondary education and treats latter as endogenous in the wage equation. My results show that OLS estimates are severely biased. The direction of the bias depends on the secondary school type. Annual returns to post-secondary education differ significantly: they are eight times higher for graduates from the highest secondary school than for graduates from the lowest secondary school.
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W.E. Upjohn Institute for Employment Research.
- Katharine G. Abraham & Susan N. Houseman, 1993. "Earnings Inequality in Germany," NBER Working Papers 4541, National Bureau of Economic Research, Inc.
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"Are OLS Estimates of the Return to Schooling Biased Downward? Another Look,"
The Review of Economics and Statistics,
MIT Press, vol. 77(2), pages 217-230, May.
- McKinley L. Blackburn & David Neumark, 1993. "Are OLS Estimates of the Return to Schooling Biased Downward? Another Look," NBER Working Papers 4259, National Bureau of Economic Research, Inc.
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