Estimating the Return to Endogenous Schooling Decisions for Australian Workers via Conditional Second Moments

Roger Klein () and Francis Vella

No 2407, IZA Discussion Papers from IZA Network @ LISER

Abstract: This paper employs conditional second moments to identify the impact of education in wage regressions where education is treated as endogenous. This approach avoids the use of instrumental variables in a setting where instruments are frequently not available. We employ this methodology to estimate the returns to schooling for a sample of Australian workers. We find that accounting for the endogeneity of education in this manner increases the estimated return to education from 6 percent to 10 percent.

Keywords: endogeneity; returns to schooling; heteroskedasticity (search for similar items in EconPapers)
JEL-codes: C31 J2 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2006-10
New Economics Papers: this item is included in nep-ecm, nep-edu and nep-hrm
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Citations: View citations in EconPapers (6)

Published - published as 'Estimating the Return to Endogenous Schooling Decisions via Conditional Second Moments' in : Journal of Human Resources, 2009, 44 (4), 1047 - 1065

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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp2407

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