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Estimating the economic return to schooling on the basis of panel data

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  • Adriaan Kalwij

Abstract

This paper is concerned with estimating the economic return to schooling of men in the Netherlands. An IV approach is adopted to estimate a panel data model with random individual effects. The fact that older individuals have relatively less schooling than younger individuals is exploited to construct instruments, and GNP per worker at the time an individual turned 16 is included to control for birth-cohort effects. The estimated return to schooling is about 15%. Ignoring the endogeneity of schooling results in a lower return to schooling. Ignoring birth-cohort effects results in a lower return to work experience.

Suggested Citation

  • Adriaan Kalwij, 2000. "Estimating the economic return to schooling on the basis of panel data," Applied Economics, Taylor & Francis Journals, vol. 32(1), pages 61-71.
    • Handle: RePEc:taf:applec:v:32:y:2000:i:1:p:61-71
    DOI: 10.1080/000368400322985
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    1. Inmaculada Garc�a Mainar & V�ctor M. Montuenga G�mez, 2004. "Returns to education and to experience within the EU: are there differences between wage earners and the self-employed?," Documentos de Trabajo dt2004-08, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    2. Levin, Jesse & Plug, Erik J. S., 1999. "Instrumenting education and the returns to schooling in the Netherlands," Labour Economics, Elsevier, vol. 6(4), pages 521-534, November.
    3. Dinand Webbink, 2004. "Returns to university education; evidence from an institutional reform," CPB Discussion Paper 34, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Dinand Webbink, 2004. "Returns to university education; evidence from an institutional reform," CPB Discussion Paper 34.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    5. García-Mainar, Inmaculada & Montuenga-Gómez, Víctor M., 2009. "Education returns of wage earners and self-employed workers: Response," Economics of Education Review, Elsevier, vol. 28(5), pages 645-647, October.
    6. Fernando Barceinas, 2003. "Endogeneidad y rendimientos de la educación," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 18(1), pages 79-131.
    7. Garcia-Mainar, Inmaculada & Montuenga-Gomez, Victor M., 2005. "Education returns of wage earners and self-employed workers: Portugal vs. Spain," Economics of Education Review, Elsevier, vol. 24(2), pages 161-170, April.
    8. A. Nikolaou & I. Theodossiou, 2006. "Returns to qualifications and occupation for males and females: evidence from the British Workplace Employee Relations Survey (WERS) 1998," Applied Economics Letters, Taylor & Francis Journals, vol. 13(10), pages 665-673.

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