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Risk-adjusted returns to education

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  • Judith M. Delaney

Abstract

This paper looks at the joint impact of labour market risk and selection into employment on returns to education estimates. The risk-adjusted returns to both high school and college for males are larger than unadjusted returns. For females, risk leads to an increase in returns to high school but to a decrease in the returns to college while correcting for selection into employment has large effects for females. The results suggest that failure to account for risk and selection into employment when calculating returns to education leads to biased estimates.

Suggested Citation

  • Judith M. Delaney, 2019. "Risk-adjusted returns to education," Education Economics, Taylor & Francis Journals, vol. 27(5), pages 472-487, September.
    • Handle: RePEc:taf:edecon:v:27:y:2019:i:5:p:472-487
    DOI: 10.1080/09645292.2019.1639625
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    More about this item

    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J1 - Labor and Demographic Economics - - Demographic Economics

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