IDEAS home Printed from https://ideas.repec.org/p/fda/fdaeee/157.html
   My bibliography  Save this paper

Actual and potential returns to schooling in Spain

Author

Listed:
  • Carmen García Prieto
  • Angel Martín Román
  • Carlos Pérez Domínguez

Abstract

The returns to formal schooling in Spain are estimated in this paper. The main difference between this and previous papers on this subject is that, here, a distinction is made between the increase in the worker's potential maximum wage due to schooling and the actual registered increase. This difference (or underpayment) can be justified on the basis of job search theory. We use the stochastic frontiers technique because it allows the estimation of variables (such as the potential wage) that cannot be directly observed. One of the main results of this paper is that formal schooling clearly increases a worker's potential maximum wage. This increase is particularly noticeable for those workers who have completed at least a five-year university program. It has also been estimated that schooling increases the degree of underpayment, which is also quite relevant in the case of long-term university education. In spite of this, the effect of formal schooling on actual wages is clearly positive.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Carmen García Prieto & Angel Martín Román & Carlos Pérez Domínguez, "undated". "Actual and potential returns to schooling in Spain," Studies on the Spanish Economy 157, FEDEA.
    • Handle: RePEc:fda:fdaeee:157
    as

    Download full text from publisher

    File URL: https://documentos.fedea.net/pubs/eee/eee157.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Juan J. Dolado & Marcel Jansen & Juan F. Jimeno, "undated". "A Matching Model of Crowding-Out and On-the-Job Search (with an application to Spain)," Working Papers 2002-16, FEDEA.
    2. J. J. McCall, 1970. "Economics of Information and Job Search," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(1), pages 113-126.
    3. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
    4. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    5. Polachek, Solomon W. & Robst, John, 1998. "Employee labor market information: comparing direct world of work measures of workers' knowledge to stochastic frontier estimates," Labour Economics, Elsevier, vol. 5(2), pages 231-242, June.
    6. Jacob Mincer, 1962. "On-the-Job Training: Costs, Returns, and Some Implications," NBER Chapters, in: Investment in Human Beings, pages 50-79, National Bureau of Economic Research, Inc.
    7. Sara de la Rica & Arantza Ugidos, 1995. "¿Son las diferencias en capital humano determinantes en las diferencias salariales observadas entre hombres y mujeres?," Investigaciones Economicas, Fundación SEPI, vol. 19(3), pages 395-414, September.
    8. Lippman, Steven A & McCall, John J, 1976. "The Economics of Job Search: A Survey," Economic Inquiry, Western Economic Association International, vol. 14(3), pages 347-368, September.
    9. Guenter Lang, 2000. "Native-Immigrant Wage Differentials in Germany - Assimilation, Discrimination, or Human Capital?," Discussion Paper Series 197, Universitaet Augsburg, Institute for Economics.
    10. Empar Pons & Maria Teresa Gonzalo, 2001. "Returns to Schooling in Spain. How Reliable Are IV Estimates?," Working Papers 446, Queen Mary University of London, School of Economics and Finance.
    11. Hofler, Richard A & Murphy, Kevin J, 1992. "Underpaid and Overworked: Measuring the Effect of Imperfect Information on Wages," Economic Inquiry, Western Economic Association International, vol. 30(3), pages 511-529, July.
    12. Kodde, David A & Palm, Franz C, 1986. "Wald Criteria for Jointly Testing Equality and Inequality Restriction s," Econometrica, Econometric Society, vol. 54(5), pages 1243-1248, September.
    13. Mortensen, Dale T, 1970. "Job Search, the Duration of Unemployment, and the Phillips Curve," American Economic Review, American Economic Association, vol. 60(5), pages 847-862, December.
    14. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    15. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
    16. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gustavo Carvalho Moreira & Ana Lucia Kassouf & Marcelo Justus, 2018. "An estimate of the underreporting of violent crimes against property applying stochastic frontier analysis to the state of Minas Gerais, Brazil [Estimativa do subregistro de crimes violentos contra a ," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 28(3), pages 778-806, September.
    2. Yeo Khee Yong & Toh Mun Heng & Shandre Mugan Thangavelu & James Wong, 2007. "Premium on Fields of Study: The Returns to Higher Education in Singapore," SCAPE Policy Research Working Paper Series 0703, National University of Singapore, Department of Economics, SCAPE.
    3. Yeo Khee Yong & Toh Mun Heng & Shandre Mugan Thangavelu & James Wong, 2007. "Premium on Fields of Study : The Returns to Higher Education in Singapore," Microeconomics Working Papers 21921, East Asian Bureau of Economic Research.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Solomon W. Polachek & Jun (Jeff) Xiang, 2006. "The Effects of Incomplete Employee Wage Information: A Cross-Country Analysis," Research in Labor Economics, in: The Economics of Immigration and Social Diversity, pages 35-75, Emerald Group Publishing Limited.
    2. M. Ángeles Díaz & Rosario Sánchez, 2013. "Young Workers, Marital Status And Wage Gap," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 21(1), pages 57-70, Spring.
    3. Vera A. Adamchik & Josef C. Brada & Arthur E. King, 2009. "Are Transition Economy Workers Underpaid?," Working Papers 278, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    4. Cuéllar Martín, Jaime & Martín-Román, Ángel L. & Moral, Alfonso, 2017. "A composed error model decomposition and spatial analysis of local unemployment," MPRA Paper 79783, University Library of Munich, Germany.
    5. Constantin Ogloblin & Gregory Brock, 2006. "Wage Determination in Rural Russia: A Stochastic Frontier Model," Post-Communist Economies, Taylor & Francis Journals, vol. 18(3), pages 315-326.
    6. Ángel L. Martín‐Román & Jaime Cuéllar‐Martín & Alfonso Moral, 2023. "Natural and cyclical unemployment: A stochastic frontier decomposition and economic policy implications," Bulletin of Economic Research, Wiley Blackwell, vol. 75(1), pages 5-39, January.
    7. Ma Ángeles Díaz & Rosario Sánchez, 2011. "Gender and potential wage in Europe: a stochastic frontier approach," International Journal of Manpower, Emerald Group Publishing Limited, vol. 32(4), pages 410-425, July.
    8. Joanna María Bashford-Fernández & Ana Rodríguez-Álvarez, 2019. "Wage Frontiers in Pre and Post-crisis Spain: Implications for Welfare and Inequality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(2), pages 579-608, June.
    9. Catherine Ris & Othman Joumady, 2005. "Diffusion du capital humain et efficience salariale. Une application sur données appariées employé-employeur," Économie et Prévision, Programme National Persée, vol. 169(3), pages 127-137.
    10. Contreras, Dulce/D & Sánchez, Rosario/R & Soria, Delfina/D, 2012. "Mobility, wages and gender across Europe," MPRA Paper 42589, University Library of Munich, Germany, revised Nov 2012.
    11. Bergemann, Annette & Mertens, Antje, 2004. "Job Stability Trends, Layoffs, and Transitions to Unemployment: An Empirical Analysis for West Germany," IZA Discussion Papers 1368, Institute of Labor Economics (IZA).
    12. M. C. Navarro-Perez & J. M. Serrano-Sanz, 2002. "Evaluating Educational Output: An Estimation Method Based on Cross-Section Data," Education Economics, Taylor & Francis Journals, vol. 10(1), pages 71-95.
    13. Vera A. Adamchik & Arthur E. King, 2007. "Labor Market Efficiency In Poland: A Stochastic Wage Frontier Analysis," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 1(2), pages 41-50.
    14. Solomon Polachek, 2003. "Mincer's Overtaking Point and the Life Cycle Earnings Distribution," Review of Economics of the Household, Springer, vol. 1(4), pages 273-304, December.
    15. Öner, Özge, 2013. "RETURNS TO LOCATION IN RETAIL: Investigating the relevance of market size and regional hierarchy," Working Paper Series in Economics and Institutions of Innovation 336, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    16. Uwe Jensen & Hermann Gartner & Susanne Rässler, 2010. "Estimating German overqualification with stochastic earnings frontiers," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 94(1), pages 33-51, March.
    17. Karina Mahirda & Heni Wahyuni, 2016. "Returning To General And Vocational High-Schools In Indonesia," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 18, pages 9-28, December.
    18. Massimo Del Gatto & Adriana Di Liberto & Carmelo Petraglia, 2011. "Measuring Productivity," Journal of Economic Surveys, Wiley Blackwell, vol. 25(5), pages 952-1008, December.
    19. Adama Zerbo, 2006. "Marché du travail urbain et pauvreté en Afrique subsaharienne : un modèle d’analyse," Documents de travail 129, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.
    20. Juan A. Cañada Vicinay, 1997. "Les équations hédoniques de salaire et la perception subjective des conditions de travail," Économie et Prévision, Programme National Persée, vol. 131(5), pages 155-174.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fda:fdaeee:157. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Carmen Arias (email available below). General contact details of provider: https://www.fedea.net .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.