, an income maximizing individual will prefer to take additional schooling rather than work Why earning functions?

This paper uses an earnings function to model how class size affects the grade students earn. It tests the model using an ordinal logit with and without fixed effects on 363,023 undergraduate observations. It finds that class size negatively affects grades. Average grade point average declines

, critiquing and creating the tables and charts used in the paper. Yu Zhu and Hester Han have also brought their considerable analytic expertise to the project. All errors and omissions are the responsibility of the authors. This paper uses an earnings function to model how class size affects the grade

Debt and Equity Assume that a firm has issued debt, which requires it to make repay-ments of value D next period. The only other security issued is equity. Equity-holders have limited liability. Returns to debt are concave in earnings. Returns to equity are a convex function of earnings.

The issue of possible non-linearities in the relationship between log wages and schooling has received a good deal of attention in the literature on the United States, as well as in Less Developed Countries (LDCs). In this paper, I use data from a recent, high quality household survey for the Philippines, the 1998 Annual Poverty Indicator Survey (APIS), to test the fit of the log-linear specification for Filipino men. I present results based on a number of estimation strategies, including spline regressions, and semiparametric regressions with a large number of dummies for years of schooling and experience. The basic conclusions of the paper are two. First, there appear to be large differences between the rates of return to education across levels in the Philippines. In particular, the wage premia to both primary and secondary education are lower than those for tertiary education. Second, within a given level, the last year of schooling is disproportionately rewarded in terms of higher wages. That is, there are clear sheepskin effects associated with graduation from primary school, secondary school, and university. Word count: 8,607 (without footnotes); 10,911 (including footnotes). * Economist, Latin America and the Caribbean Region, Poverty Reduction and Economic Management, World Bank.

1 This is quite an extended version of a paper that had been presented at several seminars and conferences. The authors are grateful to an anonymous referee and to Sol Polachek for their very useful comments and suggestions. This paper was revised when Jacques Silber visited FEDEA (Fundación de Estudios de In two pathbreaking papers Blinder (1973) and Oaxaca (1973) independently proposed a technique that allowed to decompose the relative wage gap between two population subgroups into two components, a first one measuring differences between the groups in human capital characteristics, a second one, labelled "discrimination", taking into account

Abstract not found

This paper derives optimal income tax formulas using compensated and uncompensated elasticities of earnings with respect to tax rates. A simple formula for the high income optimal tax rate is obtained as a function of these elasticities and the thickness of the top tail of the income distribution

views education and training as the major sources of human capital accumulation that, in turn, have direct and positive effect on individuals ’ life time earnings. In the Mincerian earning function, the coefficient of school years indicates the returns to education, i.e., how much addition

by the data has been the assumption that earnings relationships are the same across the nation or, at least, across very sizable aggregations of states. This paper examines the viability of such assumptions by looking at differences in earnings functions among smaller, more homogeneous labor markets. This res