Earnings Functions and Rates of Return

James J. Heckman, Lance Lochner () and Petra E. Todd

No 13780, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The internal rate of return to schooling is a fundamental economic parameter that is often used to assess whether expenditure on education should be increased or decreased. This paper considers alternative approaches to estimating marginal internal rates of return for different schooling levels. We implement a general nonparametric approach to estimate marginal internal rates of return that take into account tuition costs, income taxes and nonlinearities in the earnings-schooling-experience relationship. The returns obtained by the more general method differ substantially from Mincer returns in levels and in their evolution over time. They indicate relatively larger returns to graduating from high school than from graduating from college, although both have been increasing over time.

JEL-codes: C31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu and nep-ltv
Date: 2008-02
Note: LS
View list of references View citations in EconPapers

Downloads: (external link)
http://www.nber.org/papers/w13780.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html.

Related works:
Working Paper: EARNINGS FUNCTIONS AND RATES OF RETURN (2008)
Working Paper: Earnings Functions and Rates of Return (2008)
Working Paper: Earnings Functions and Rates of Return (2008)
Journal Article: Earnings Functions and Rates of Return (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:nbr:nberwo:13780

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w13780
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc
Address: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Contact information at EDIRC.
Series data maintained by ().