Changes Across Cohorts in Wage Returns to Schooling and Early Work Experiences

65 Pages Posted: 8 Jan 2018

See all articles by Jared Ashworth

Jared Ashworth

Pepperdine University

V. Joseph Hotz

Duke University; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Arnaud Maurel

Duke University - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

Tyler Ransom

University of Oklahoma; Institute for the Study of Labor (IZA)

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Abstract

This paper investigates the wage returns to schooling and actual early work experiences, and how these returns have changed over the past twenty years. Using the NLSY surveys, we develop and estimate a dynamic model of the joint schooling and work decisions that young men make in early adulthood, and quantify how they affect wages using a generalized Mincerian specification. Our results highlight the need to account for dynamic selection and changes in composition when analyzing changes in wage returns. In particular, we find that ignoring the selectivity of accumulated work experiences results in overstatement of the returns to education.

Keywords: schooling, human capital, wage returns, selection

JEL Classification: C33, J22, J24, I21, I26

Suggested Citation

Ashworth, Jared and Hotz, V. Joseph and Maurel, Arnaud and Ransom, Tyler, Changes Across Cohorts in Wage Returns to Schooling and Early Work Experiences. IZA Discussion Paper No. 11231, Available at SSRN: https://ssrn.com/abstract=3097329

Jared Ashworth (Contact Author)

Pepperdine University

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V. Joseph Hotz

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Arnaud Maurel

Duke University - Department of Economics ( email )

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National Bureau of Economic Research (NBER) ( email )

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Tyler Ransom

University of Oklahoma ( email )

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