Separating Uncertainty from Heterogeneity in Life Cycle Earnings
James Heckman and
Salvador Navarro ()
No 1437, IZA Discussion Papers from Institute of Labor Economics (IZA)
This paper develops and applies a method for decomposing cross section variability of earnings into components that are forecastable at the time students decide to go to college (heterogeneity) and components that are unforecastable. About 60% of variability in returns to schooling is forecastable. This has important implications for using measured variability to price risk and predict college attendance.
Keywords: counterfactuals; uncertainty; lifecycle earnings; schooling; heterogeneity (search for similar items in EconPapers)
JEL-codes: C33 D84 I21 (search for similar items in EconPapers)
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Published in: Oxford Economic Papers, 2005, 57 (2), 191-261
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Journal Article: Separating uncertainty from heterogeneity in life cycle earnings (2005)
Working Paper: Separating Uncertainty from Heterogeneity in Life Cycle Earnings (2005)
Working Paper: Separating uncertainty from heterogeneity in life cycle earnings (2004)
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