IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/0049.html
   My bibliography  Save this paper

Years and Intensity of Schooling Investing

Author

Listed:
  • Arleen Leibowitz

Abstract

An essential feature of schooling is not only that it occurs in a different site than most on-the-job training but also that it is more intensive. That is, a smaller proportion of gross potential earnings is sacrificed in on-the-job training than in schooling. In estimating human capital earnings functions it has generally been assumed that during schooling 100% of gross potential earnings are invested in all years, while in on-the-job training this percentage is smaller and is a declining function of age. This assumption has been quite useful since it allows the identification of an estimate of the rate of return on schooling from a regression of earnings on years of schooling. This paper argues that the percentage of gross earnings invested may fall below 100% well before schooling is ended, that this percentage is likely to be correlated with years of schooling, and thus this procedure yields only a biased estimate of the rate of return to schooling.

Suggested Citation

  • Arleen Leibowitz, 1974. "Years and Intensity of Schooling Investing," NBER Working Papers 0049, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:0049
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w0049.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Griliches, Zvi & Mason, William M, 1972. "Education, Income, and Ability," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages 74-103, Part II, .
    2. Giora Hanoch, 1967. "An Economic Analysis of Earnings and Schooling," Journal of Human Resources, University of Wisconsin Press, vol. 2(3), pages 310-329.
    3. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 76-108, Part II, .
    4. Yorman Ben-Porath, 1970. "The Production of Human Capital Over Time," NBER Chapters, in: Education, Income, and Human Capital, pages 129-154, National Bureau of Economic Research, Inc.
    5. Lee A. Lillard, 1973. "Human Capital Life Cycle of Earnings Models: A Specific Solution and Estimation," NBER Working Papers 0004, National Bureau of Economic Research, Inc.
    6. Lewis C. Solmon, 1973. "The Definition and Impact of College Quality," NBER Working Papers 0007, National Bureau of Economic Research, Inc.
    7. Hause, John C, 1972. "Earnings Profile: Ability and Schooling," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages 108-138, Part II, .
    8. Johnson, Thomas, 1970. "Returns from Investment in Human Capital," American Economic Review, American Economic Association, vol. 60(4), pages 546-560, September.
    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. Mu Lin & Jingxin Gao & Yongjie Du & Pengyu Ren, 2023. "Mismatch in Urban Construction Land Use and Economic Growth: Empirical Evidence from China," Land, MDPI, vol. 12(2), pages 1-21, February.

    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. Lillard, Lee A, 1977. "Inequality: Earnings vs. Human Wealth," American Economic Review, American Economic Association, vol. 67(2), pages 42-53, March.
    2. Edward Lazear, 1977. "Schooling as a Wage Depressant," Journal of Human Resources, University of Wisconsin Press, vol. 12(2), pages 164-176.
    3. Lee A. Lillard, 1977. "An Essay on Human Wealth," NBER Chapters, in: Explorations in Economic Research, Volume 4, number 5, pages 702-752, National Bureau of Economic Research, Inc.
    4. repec:eee:labchp:v:1:y:1986:i:c:p:525-602 is not listed on IDEAS
    5. Paul Wachtel, 1975. "The Effect of School Quality on Achievement, Attainment Levels, and Lifetime Earnings," NBER Chapters, in: Explorations in Economic Research, Volume 2, number 4, pages 502-536, National Bureau of Economic Research, Inc.
    6. repec:eee:labchp:v:1:y:1986:i:c:p:357-386 is not listed on IDEAS
    7. Yoram Weiss, 1976. "A Multiplicative Model of Investment in Human Capital," NBER Working Papers 0140, National Bureau of Economic Research, Inc.
    8. Fortin, Bernard & Ragued, Safa, 2017. "Does temporary interruption in postsecondary education induce a wage penalty? Evidence from Canada," Economics of Education Review, Elsevier, vol. 58(C), pages 108-122.
    9. María Arrazola & José de Hevia & Marta Risueño & José Félix Sanz Sanz, 2005. "A proposal to estimate human capital depreciation: some evidence for Spain," Hacienda Pública Española / Review of Public Economics, IEF, vol. 172(1), pages 9-22, June.
    10. Paul Taubman & Terence Wales, 1975. "Education as an Investment and a Screening Device," NBER Chapters, in: Education, Income, and Human Behavior, pages 95-122, National Bureau of Economic Research, Inc.
    11. repec:eee:labchp:v:1:y:1986:i:c:p:693-785 is not listed on IDEAS
    12. Light, Audrey, 2001. "In-School Work Experience and the Returns to Schooling," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 65-93, January.
    13. Polachek, Solomon W., 2008. "Earnings Over the Life Cycle: The Mincer Earnings Function and Its Applications," Foundations and Trends(R) in Microeconomics, now publishers, vol. 4(3), pages 165-272, April.
    14. Heckman, James J. & Lochner, Lance John & Todd, Petra E., 2003. "Fifty Years of Mincer Earnings Regressions," IZA Discussion Papers 775, Institute of Labor Economics (IZA).
    15. Reuben Gronau, 2010. "Zvi Griliches' Contribution to the Theory of Human Capital," NBER Chapters, in: Contributions in Memory of Zvi Griliches, pages 275-297, National Bureau of Economic Research, Inc.
    16. Tracy L. Regan & Ronald L. Oaxaca & Galen Burghardt, 2007. "A Human Capital Model Of The Effects Of Ability And Family Background On Optimal Schooling Levels," Economic Inquiry, Western Economic Association International, vol. 45(4), pages 721-738, October.
    17. Chaitali Sinha, 2014. "Human Capital and Public Policy," South Asian Journal of Macroeconomics and Public Finance, , vol. 3(1), pages 79-125, June.
    18. Michael Grossman, 1999. "The Human Capital Model of the Demand for Health," NBER Working Papers 7078, National Bureau of Economic Research, Inc.
    19. Michael Grossman, 2006. "Household Production and Health," Springer Books, in: Shoshana Grossbard (ed.), Jacob Mincer A Pioneer of Modern Labor Economics, chapter 13, pages 161-172, Springer.
    20. Lang, Kevin, 1993. "Ability Bias, Discount Rate Bias and the Return to Education," MPRA Paper 24651, University Library of Munich, Germany.
    21. Dougherty, Christopher, 2003. "Numeracy, literacy and earnings: evidence from the National Longitudinal Survey of Youth," Economics of Education Review, Elsevier, vol. 22(5), pages 511-521, October.
    22. Jacob Mincer, 1974. "Progress in Human Capital Analysis of the Distribution of Earnings," NBER Working Papers 0053, National Bureau of Economic Research, Inc.
    23. repec:eee:labchp:v:1:y:1986:i:c:p:603-640 is not listed on IDEAS
    24. Irias, Luiz Jose Maria & Avila, Antonio Flavio Dias, 1987. "Returns to Investment in Training of Agricultural Researchers," 1987 Occasional Paper Series No. 4 197419, International Association of Agricultural Economists.

    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:nbr:nberwo:0049. 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    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.