effects of time-varying unobserved ability and comparative advantage biases across cohorts. I conclude that the rise in the causal effect of education, and not the rise in the return to unobserved ability explains most of the observed change in the educational wage structure

Research disseminated by IZA may include views on policy, but

This Article is brought to you for free and open access by the Economics Department at Scholar Commons. It has been accepted for inclusion in Faculty Publications by an authorized administrator of Scholar Commons. For more information, please contact SCHOLARC@mailbox.sc.edu.

Unobserved ability heterogeneity has long been postulated to play a key role in human capital development. Traditional strategies to estimate education production functions do not allow for varying role or development of unobserved ability as a child ages. Such restrictions are highly inconsistent

The paper analyzes the impacts of an individual’s unobserved ability on schooling and wages in the context of a developing country using rich data from the Cebu (Philippines) Longitudinal Health and Nutrition Survey. Unlike any previous study, my model allows for grade repetition and school reentry

parameter estimates of observed educational inputs researchers must properly account for these unobserved skills. In this paper, we introduce a strategy to estimate education production functions that allows for time-varying unobserved ability within individuals and a more general decaying pattern

Any opinions expressed here are those of the author(s) and not those of the institute. Research disseminated by IZA may include views on policy, but the institute itself takes no institutional policy positions. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be

Sustained growth in earnings and wage inequality over the past few decades (most notably in the U.S. but also in many other developed countries) has generated widespread interest in both its causes and consequences, spurring large bodies of research in labor economics, macroeconomics, and growth economics. 1 Perhaps, the greatest efforts have been devoted to understanding the role

Die ZBW räumt Ihnen als Nutzerin/Nutzer das unentgeltliche, räumlich unbeschränkte und zeitlich auf die Dauer des Schutzrechts beschränkte einfache Recht ein, das ausgewählte Werk im Rahmen der unter

Any opinions expressed here are those of the author(s) and not those of the institute. Research disseminated by IZA may include views on policy, but the institute itself takes no institutional policy positions. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn