Does the Choice of Reference Levels of Education Matter in the ORU Earnings Equation?

Barry Chiswick and Paul Miller

No 4382, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper examines whether the results of the earnings equation developed in the overeducation/required eduation/under-education (ORU) literature are sensitive to whether the usual or reference levels of education are measured using the Realized Matches or Worker Self-Assessment methods. The analyses are conducted for all male native-born and immigrant workers in the US, by level of skill, and by occupation. While point estimates differ, particularly when earnings equations are estimated for the smaller samples of sub-groups of the workforce, the general findings are robust to this measurement issue. Thus, the answers provided to the typical research questions in the ORU literature on the utilization of schooling are independent of the measure of the usual or reference level of education used in the analyses.

Keywords: rates of return; immigrants; skill; schooling; occupations; earnings (search for similar items in EconPapers)
JEL-codes: F22 I21 J24 J31 J61 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2009-08
New Economics Papers: this item is included in nep-hrm, nep-lab and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published - published in: Economics of Education Review, 2010, 29 (6), 1076-1085

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Journal Article: Does the choice of reference levels of education matter in the ORU earnings equation? (2010)
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