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Estimating returns to schooling and experience: a history of thought

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  • Barry R. Chiswick

Abstract

This paper is a review of the literature in economics on the effect on earnings of human capital investment from Adam Smith to the early 1980s. It discusses the use of the net present value (NPV) technique by Walsh and Friedman and Kuznets, and Becker’s use of the NPV to estimate the internal rate of return to schooling. The first regression-based approach was the Becker and Chiswick ‘schooling-earnings function’, which was expanded by Mincer to the ‘human capital earnings function’ (HCEF) by incorporating on-the-job training. Extensions of the HCEF in the 1970s and early 1980s are discussed.

Suggested Citation

  • Barry R. Chiswick, 2024. "Estimating returns to schooling and experience: a history of thought," Education Economics, Taylor & Francis Journals, vol. 32(5), pages 566-580, September.
  • Handle: RePEc:taf:edecon:v:32:y:2024:i:5:p:566-580
    DOI: 10.1080/09645292.2024.2326015
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    References listed on IDEAS

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    1. J. R. Walsh, 1935. "Capital Concept Applied to Man," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 49(2), pages 255-285.
    2. Jacob Mincer & Solomon Polachek, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters, in: Marriage, Family, Human Capital, and Fertility, pages 76-110, National Bureau of Economic Research, Inc.
    3. Barry R. Chiswick, 1974. "Income Inequality: Regional Analyses within a Human Capital Framework," NBER Books, National Bureau of Economic Research, Inc, number chis74-1, June.
    4. Chiswick, Carmel Ullman, 1977. "On estimating earnings functions for LDCs," Journal of Development Economics, Elsevier, vol. 4(1), pages 67-78, February.
    5. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    6. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, June.
    7. Milton Friedman & Simon Kuznets, 1945. "Income from Independent Professional Practice," NBER Books, National Bureau of Economic Research, Inc, number frie54-1, June.
    8. Barry R. Chiswick & Paul W. Miller, 2012. "Negative and Positive Assimilation, Skill Transferability, and Linguistic Distance," Journal of Human Capital, University of Chicago Press, vol. 6(1), pages 35-55.
    9. Chiswick, Barry R & Mincer, Jacob, 1972. "Time-Series Changes in Personal Income Inequality in the United States from 1939, with Projections to 1985," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages 34-66, Part II, .
    10. Gary S. Becker, 1964. "Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, First Edition," NBER Books, National Bureau of Economic Research, Inc, number beck-5, June.
    11. Jennifer L. Doleac, 2023. "Encouraging Desistance from Crime," Journal of Economic Literature, American Economic Association, vol. 61(2), pages 383-427, June.
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    More about this item

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • B29 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Other

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