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Contribution Details

Type Conference Presentation
Scope Discipline-based scholarship
Title Heterogeneous returns to education over wage distribution: who profits the most?
Organization Unit
Authors
  • Simone Balestra
Presentation Type paper
Item Subtype Original Work
Refereed Yes
Status Published electronically before print/final form (Epub ahead of print)
Language
  • English
Event Title Annual meeting of the Canadian Economics Association
Event Type conference
Event Location Vancouver (Canada)
Event Start Date May 30 - 2014
Event End Date June 1 - 2014
Abstract Text This study presents evidence of heterogeneous returns to education over the wage distribution. The authors use instrumental variable quantile regression and data from the Swiss Labor Force Survey to identify the causal link between education and wages at different quantiles of the conditional distribution of wages. The results provide evidence that there is no unique causal effect of schooling and that for each individual the effect may deviate from those extensively documented by ordinary least squares or two-stage least squares. In particular, while ordinary quantile regression estimates increasing returns in the quantile index, once the endogeneity of schooling is taken into account the authors instead observe higher returns at lower quantiles of the wage distribution. Interpreting the quantile index as a measure of unobserved ability, the results suggest that higher-ability individuals have higher wages, but the slope of their wage-education profile is flatter than that for lower ability individuals.
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