Abstract not found

A number of recent studies have documented important gaps in post-secondary enrollment by family income and cognitive ability or achievement (Manski and Wise 1983, Cameron and Heckman 1998, 2001, Ellwood and Kane 2000, Carneiro and Heckman 2002). This paper uses very similar data from

This papers contains a survey of the recent literature devoted to the returns to schooling within a dynamic structural framework. I present a historical perspective on the evolution of the literature, from early static models set in a selectivity framework (Willis and Rosen, 1979) to the recent literature, stimulated by Keane and Wolpin (1997), and which uses stochastic dynamic programming techniques. After reviewing the literature thoroughly, I compare the structural approach with the IV (experimental) approach. I present their commonalities and I also discuss their fundamental differences. The discussion is focussed on the comprehension of the discrepancy between structural and reduced-form estimates of the returns to schooling.

a b s t r a c t We examine gender wage disparities for four groups of college-educated women—black, Hispanic, Asian, and non-Hispanic white—using the National Survey of College Graduates. Raw log wage gaps, relative to non-Hispanic white male counterparts, generally exceed-0.30. Estimated gaps decline to between-0.08 and-0.19 in nonparametric analyses that (1) restrict attention to individuals who speak English at home and (2) match individuals on age, highest degree, and major. Among women with work experience comparable to men’s, these estimated gaps are smaller yet—between-0.004 and-0.13. Importantly, we find that inferences from familiar regression-based decompositions can be quite misleading. I.

Our research examines empirically the age pattern of the implicit value of life revealed from workers ’ differential wages and job safety pairings. Although aging reduces the number of years of life expectancy, aging can affect the value of life through an effect on planned life-cycle consumption. The elderly could, a priori, have the highest implicit value of life if there is a life-cycle plan to defer consumption until old age. We find that largely due to the age pattern of consumption, which is non-constant, the implicit value of life rises and falls over the lifetime in a way that the value for the elderly is higher than the average over all ages or for the young. There are important health policy implications of our empirical results. Because there may be age-specific benefits of programs to save statistical lives, instead of valuing the lives of the elderly at less than the young, health policymakers should more correctly value the lives of the elderly at as much as twice the young because of relatively greater consumption lost when accidental death occurs.

situation in Egypt. Trey Miller provided helpful research assistance. We benefited from many useful

Mincer wage equations focus on the earnings premium associated with additional schooling for a cross section of individuals of different ages but generally fail to account for changes in education quality over time. More fundamentally, school attainment is an inadequate proxy of individual skills, when both family inputs and ability affect cognitive skills. We combine quality-adjusted measures of schooling and international literacy test information to estimate skill gradients for 13 countries. The premiums to quality-adjusted education are considerably higher than the traditional Mincer estimate for most countries, but this bias is more than offset by consideration of other factors affecting skills and earnings.

Abstract not found

Since the pioneering work of Gary S. Becker and Jacob Mincer, the application of investment theory to the study of individuals' education decisions has become commonplace. People are assumed to weigh short-term costs against future benefits and choose the schooling level that maximizes welfare. This static framework abstracts from uncertainty and suggests that few people should drop out if the marginal earnings gain from graduating is high, as it appears to be. In reality, schooling decisions involve much uncertainty, outcomes often deviate from expectations, and dropout is common. 1 Despite its salience and its importance to investment generally, uncertainty has historically received relatively little attention in the study of education. 2 This paper examines the consequences of educational uncertainty using a structural model in which schooling decisions are sequential and academic ability is learned through grades. Since psychic schooling costs depend on ability, people refine their expectations of them over time. This set-up is analogous to Pindyck's (1993) model of "technical" cost uncertainty, where the cost of completing a long-term project is revealed only as in-

Draft-lottery estimates of the consequences of Vietnam-era service using 2000 census data show marked schooling gains for veterans. We argue that these gains can be attributed to Vietnam veterans ’ use of the GI Bill rather than draft avoidance behavior. At the same time, draft lottery estimates of the earnings consequences of Vietnam-era service are close to zero in 2000. These results can be reconciled by a flattening of the age-earnings profile in middle age and a modest economic return to the schooling subsidized by the GI Bill. Other long-run consequences of Vietnam-era service include increased migration and public-sector employment. Economists have long argued that compulsory military service amounts to a hidden tax on soldiers. American conscripts were paid poorly while in the military and lost valuable labor-market experience relative to their civilian counterparts (Walter Oi, 1967). On the other hand, some social scientists see military service as a possible leg up, even for draftees, primarily because of the generous GI Bill schooling benefits available to