EconPapers    
Economics at your fingertips  
 

Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond

James Heckman, Lance Lochner () and Petra Todd

No 11544, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper considers the interpretation of "Mincer rates of return." We test and reject the Mincer model. It fails to track the time series of true returns. We show how repeated cross section and panel data improves the ability of analysts to estimate the ex ante and ex post marginal rate of returns. Accounting for sequential revelation of information calls into question the validity of the internal rate of return as a tool for policy analysis. The large estimated psychic costs of schooling found in recent work helps to explain why persons do not attend school even though the financial rewards for doing so are high. We present methods for computing distributions of ex post and ex ante returns.

JEL-codes: C31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-for and nep-ltv
Date: 2005-08
Note: LS
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39) Track citations by RSS feed

Published as Heckman, James J. & Lochner, Lance J. & Todd, Petra E., 2006. "Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond," Handbook of the Economics of Education, Elsevier.

Downloads: (external link)
http://www.nber.org/papers/w11544.pdf (application/pdf)

Related works:
Chapter: Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond (2006) Downloads
Working Paper: Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond (2005) Downloads
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:nbr:nberwo:11544

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w11544

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2019-06-19
Handle: RePEc:nbr:nberwo:11544