Dispersion in the economic return to schooling

Harmon, Colm; Hogan, Vincent; Walker, Ian

doi:10.1016/s0927-5371(03)00003-4

Cited by 66 publications

(58 citation statements)

References 12 publications

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“…Relying on this study is attractive because Harmon et al estimate the mean of the return to education to be exactly at the value of our benchmark calibration (at 6.8 percent) such that we need no changes at all for the calibrated model. Other studies (referenced in Harmon et al, 2003) arrive at quantitatively similar estimates. A standard deviation of 4.2 is huge since it implies that, optimally, a part of the population should acquire no education at all (based on their low individual return) and another part should obtain only compulsory education.…”

supporting

confidence: 61%

“…Harmon et al (2003), for example, estimate a standard deviation of 4 percent for a mean return of education of about 7 percent. A natural explanation for idiosyncratic differences in the return to education are cognitive and non-cognitive abilities (e.g.…”

mentioning

confidence: 99%

“…For this purpose, we investigate a society that differs by their return to education (and nothing else). We built the calibration on Harmon et al (2003) who explicitly consider dispersion of the return to education at the individual level. Assuming it is normally distributed, they estimate a standard deviation of 4.2 percent.…”

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confidence: 99%

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The return to education in terms of wealth and health

Strulik

2018

The Journal of the Economics of Ageing

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract. This study presents a new view on the association between education and longevity. In contrast to the earlier literature, which focused on inefficient health behavior of the less educated, we investigate the extent to which the education gradient can be explained by fully rational and efficient behavior of all social strata. Specifically, we consider a life-cycle model in which the loss of body functionality, which eventually leads to death, can be accelerated by unhealthy behavior and delayed through health expenditure. Terms of use: Documents inIndividuals are heterogeneous with respect to their return to education. The proposed theory rationalizes why individuals equipped with a higher return to education chose more education as well as a healthier lifestyle. When calibrated for the average male US citizen, the model motivates about 50% percent of the observable education gradient by idiosyncratic returns to education, with causality running from education to longevity.The theory also explains why compulsory schooling has comparatively small effects on longevity and why the gradient gets larger over time through improvements in medical technology.

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confidence: 61%

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confidence: 99%

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The return to education in terms of wealth and health

Strulik

2018

The Journal of the Economics of Ageing

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“…26 The first stage regressions often indicate that schooling is inversely related to smoking behavior. In the literature, this finding is often interpreted as evidence that risk averse individuals (those who smoke less), or individuals with higher discount rates, obtain more schooling.…”

Section: Comparing Our Results With the Existing Literaturementioning

confidence: 99%

Can Risk Aversion Explain Schooling Attainments? Evidence from Italy

Belzil

Leonardi

2006

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Can Risk Aversion Explain Schooling Attainments? Evidence from ItalyChristian Belzil Marco Leonardi We analyze how grade transition from one level to the next varies with preference heterogeneity (risk aversion), parental human capital, socioeconomic variables and persistent unobserved (to the econometrician) heterogeneity. We present evidence that schooling continuation probabilities decrease with risk aversion at low grade levels, but increase with risk aversion at the time when the decision to enter higher education is made. However, differences in attitudes toward risk account for a modest portion of the probability of entering higher education. Differences in parental human capital and ability(ies) are much more important. D I S C U S S I O N P A P E R S E R I E SJEL Classification: J24

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“…This information is not always readily available. Random coefficients models allow for parameter heterogeneity and estimation in a cross-section, but are subject to the same functional form restrictions as typical panel data estimators (Harmon, Hogan and Walker 2003). Specifically, if the specified parametric functional form is incorrect, estimation generally leads to inconsistent estimates.…”

Section: Introductionmentioning

confidence: 99%

Heterogeneity in schooling rates of return

Henderson

Polachek

Wang

2011

Economics of Education Review

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This paper relaxes the assumption of homogenous rates of return to schooling by employing nonparametric kernel regression. This approach allows us to examine the differences in rates of return of education both across and within groups. Similar to previous studies we find that on average blacks have higher returns to education than whites, natives have higher returns than immigrants and younger workers have higher returns than older workers. Contrary to previous studies we find that the average gap of the rate of return between white and black workers is larger than previously thought and the gap is smaller between immigrants and natives. We also uncover significant heterogeneity both across and within groups. The estimated densities of returns vary across groups and time periods and is often skewed. Further examination of the densities shows significant portions of the population possessing negative returns. The negative returns are more common in older workers, individuals with young children and immigrants.

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Dispersion in the economic return to schooling

Cited by 66 publications

References 12 publications

The return to education in terms of wealth and health

The return to education in terms of wealth and health

Can Risk Aversion Explain Schooling Attainments? Evidence from Italy

Heterogeneity in schooling rates of return

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