Earnings functions and rates of return

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Title: Earnings functions and rates of return
Authors: Heckman, James J.
Lochner, Lance
Todd, Petra
Permanent link: http://hdl.handle.net/10197/1822
Date: 15-Dec-2008
Abstract: The internal rate of return to schooling is a fundamental economic parameter that is often used to assess whether expenditure on education should be increased or decreased. This paper considers alternative approaches to estimating marginal internal rates of return for different schooling levels. We implement a general nonparametric approach to estimate marginal internal rates of return that take into account tuition costs, income taxes and nonlinearities in the earnings-schooling-experience relationship. The returns obtained by the more general method differ substantially from Mincer returns in levels and in their evolution over time. They indicate relatively larger returns to graduating from high school than from graduating from college, although both have been increasing over time.
Funding Details: NIH R01-HD043411
NSF 97-09-873
NSF SES-0099195
NSF SES-0241858
American Bar Foundation
Type of material: Working Paper
Publisher: University College Dublin. Geary Institute
Series/Report no.: UCD Geary Institute Discussion Paper Series; WP/31/2008
Subject LCSH: Wages--Effect of education on
Education--Economic aspects
Other versions: http://www.ucd.ie/geary/static/publications/workingpapers/gearywp200831.pdf
Language: en
Status of Item: Not peer reviewed
metadata.dc.date.available: 2010-02-04T16:40:05Z
Appears in Collections:Geary Institute Working Papers

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