Dispersion in the economic return to schooling

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Title: Dispersion in the economic return to schooling
Authors: Harmon, Colm
Hogan, Vincent (Vincent Peter)
Walker, Ian
Permanent link: http://hdl.handle.net/10197/929
Date: Aug-2001
Abstract: In this paper we extend the standard human capital earnings function to include dispersion in the rate of return to schooling by treating the return as a random coefficient. One motivation is that if the increase in supply of skilled workers has been brought about by dipping further into the ability distribution. Alternatively if the expansion in post-compulsory education comes about through relaxed credit constraints then we might expect this to increase average ability in the pool of educated workers. Either event might lead to a rise in the variance in returns. Based on a sample of data from the United Kingdom our estimates suggest that neither the mean nor the dispersion in returns to schooling has altered significantly over time. This is consistent with educational expansion not leading to a disproportionate inflow of low ability individuals into the system.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP01/16
Copyright (published version): UCD School of Economics 2001
Subject LCSH: Education--Economic aspects
Wages--Effect of education on
Labor supply--Effect of education on
Other versions: http://www.ucd.ie/economics/research/papers/2001/WP01.16.pdf
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Geary Institute Research Collection
Economics Working Papers & Policy Papers

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