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Returns to education and wage equations

Pedro Pereira and Pedro Martins

Applied Economics, 2004, vol. 36, issue 6, 525-531

Abstract: The paper shows why considering a number of education-dependent covariates in a wage equation decreases the coefficient of education in that equation. This result is illustrated empirically with a meta-analysis for Portugal. The education coefficient decreases when covariates are used that can be considered post-education decisions; on the other hand, it is independent of sample size, tenure and whether hourly or monthly wages are used. These results support the use of a simple specification of the Mincer equation for the study of the total returns to education.

Date: 2004
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DOI: 10.1080/0003684042000217571

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