Does the Choice of Reference Levels of Education Matter in the Oru Earnings Equation?

32 Pages Posted: 15 Oct 2009

See all articles by Barry R. Chiswick

Barry R. Chiswick

University of Illinois at Chicago; IZA Institute of Labor Economics

Paul W. Miller

Curtin University of Technology - School of Economics and Finance; IZA Institute of Labor Economics; Curtin University - Centre for Research in Applied Economics

Abstract

This paper examines whether the results of the earnings equation developed in the overeducation/required eduation/under-education (ORU) literature are sensitive to whether the usual or reference levels of education are measured using the Realized Matches or Worker Self-Assessment methods. The analyses are conducted for all male native-born and immigrant workers in the US, by level of skill, and by occupation. While point estimates differ, particularly when earnings equations are estimated for the smaller samples of sub-groups of the workforce, the general findings are robust to this measurement issue. Thus, the answers provided to the typical research questions in the ORU literature on the utilization of schooling are independent of the measure of the usual or reference level of education used in the analyses.

Keywords: immigrants, skill, schooling, occupations, earnings, rates of return

JEL Classification: I21, J24, J31, J61, F22

Suggested Citation

Chiswick, Barry R. and Miller, Paul W., Does the Choice of Reference Levels of Education Matter in the Oru Earnings Equation?. IZA Discussion Paper No. 4382. Available at SSRN: https://ssrn.com/abstract=1489205

Barry R. Chiswick (Contact Author)

University of Illinois at Chicago ( email )

601 S. Morgan Street, Room 2103UH
Chicago, IL 60607-7121
United States
312-996-2683 (Phone)
312-996-3344 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Paul W. Miller

Curtin University of Technology - School of Economics and Finance ( email )

GPO Box U1987
Perth WA 6845
Australia

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Curtin University - Centre for Research in Applied Economics ( email )

GPO Box U1987
Perth, Western Australia 6845
Australia

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