Economic Returns to Education in France: OLS and Instrumental Variable Estimations

Sajjad Haider Bhatti, Jean Bourdon () and Aslam Muhammad
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Sajjad Haider Bhatti: IREDU - Institut de recherche sur l'éducation : Sociologie et Economie de l'Education - UB - Université de Bourgogne
Aslam Muhammad: Department of Statistics - BZU - Bahauddin Zakariya University

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Abstract: This article estimates the economic returns to schooling as well as analyzing other explanatory factors for the French labor market. It addresses the issue of endogeneity bias and proposes two new instruments for use in the instrumental variable two-stage least squares technique. Our results show that the proposed instruments are relevant and adequate, based on evidence from the available literature. After using the proposed instruments, we find that the OLS coefficients for schooling are biased downwards. Finally, we choose between the two proposed instruments.

Keywords: Endogeneity bias; Instrumental variable; Mincerian model; Two-stage least squares; Wage regression; France; Biais d'endogénéité; Variable instrumentale; Modèle mincérien; Équation de Mincer; Modèle des moindres carrés; Régression; Salaire (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

Published in The Lahore Journal of Economics, 2013, Vol.18 (N°2), pp.51-63

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00955559

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