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Marginal College Wage Premiums Under Selection Into Employment

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  • Matthias Westphal
  • Daniel A Kamhöfer
  • Hendrik Schmitz

Abstract

We identify female long-term wage returns to college education using the educational expansion between 1960–90 in West Germany as exogenous variation for college enrolment. We estimate marginal treatment effects and propose a simple partial identification technique accounting for women selecting into employment due to having a college education. College-educated women are, on average, more than 18 percentage points more likely to be employed due to having a college education than those without college education. Taking this into account, we bound wage returns to 5.7%–13.9% per year of education completed (average treatment effects on the treated).

Suggested Citation

  • Matthias Westphal & Daniel A Kamhöfer & Hendrik Schmitz, 2022. "Marginal College Wage Premiums Under Selection Into Employment," The Economic Journal, Royal Economic Society, vol. 132(646), pages 2231-2272.
    • Handle: RePEc:oup:econjl:v:132:y:2022:i:646:p:2231-2272.
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    4. Antonio Di Paolo & Khalifany-Ash Shidiqi, 2024. "“Education and Ethnic Intermarriage: Evidence from Higher Education Expansion in Indonesia”," AQR Working Papers 202403, University of Barcelona, Regional Quantitative Analysis Group, revised May 2024.

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    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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