EconPapers    
Economics at your fingertips  
 

Persistence Bias and Schooling Returns

Corrado Andini ()

No 8143, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: A well-established empirical literature suggests that individual wages are persistent. Several theoretical arguments support this empirical finding. Yet, the standard approach to the estimation of schooling returns does not account for this fact. This paper investigates the consequences of disregarding earnings persistence. In particular, it shows that the most commonly used static-model estimators of schooling coefficients are subject to an omitted-variable bias which can be named "persistence bias".

Keywords: schooling; wages; dynamic panel-data models (search for similar items in EconPapers)
JEL-codes: C23 I21 J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ecm and nep-lab
Date: 2014-04
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://ftp.iza.org/dp8143.pdf (application/pdf)

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: https://EconPapers.repec.org/RePEc:iza:izadps:dp8143

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute for the Study of Labor (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Series data maintained by Mark Fallak ().

 
Page updated 2017-10-09
Handle: RePEc:iza:izadps:dp8143