Economics at your fingertips  


Eliana Baici () and Paolo Ghinetti ()
Additional contact information
Eliana Baici: Dipartimento di Studi per l’Economia e l’Impresa, Universita` del Piemonte Orientale

Rivista Internazionale di Scienze Sociali, 2020, vol. 128, issue 1, 85-103

Abstract: The estimation of the return from an additional education unit is subject to the ‘‘ability bias’’, responsible for the ‘‘endogeneity’’ of education to wages, and the ‘‘return bias’’, induced by self-selection into education levels based on individual-specific unobservable gains. We use a control functions estimator that, differently to standard instrumental variables, can account for both selection mechanisms. It adds two corrections terms to the wage equation, one for each selectivity source. We use Bank of Italy data for Italian men in the 25-60 age interval. Identification uses a major reform that in 1962 increased years of compulsory schooling, implemented through a set of cohort dummies as exclusion restrictions. We find no evidence of absolute unobservable wage advantages for the more educated. Still, they are positively self-selected: they study more because their marginal return to education is higher than the average, due to specific unobservable gains from additional schooling

Keywords: Wages; Education returns; Control functions; Italy (search for similar items in EconPapers)
JEL-codes: C3 I26 J31 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link) ... 001_0085-370154.html (text/html)

Related works:
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:

Access Statistics for this article

Rivista Internazionale di Scienze Sociali is currently edited by Maurizio Baussola

More articles in Rivista Internazionale di Scienze Sociali from Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore
Bibliographic data for series maintained by Vep - Vita e Pensiero ().

Page updated 2021-09-17
Handle: RePEc:vep:journl:y:2020:v:128:i:1:p:85-103