Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20880
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dc.contributor.authorBelzil, Christianen_US
dc.contributor.authorHansen, Joergenen_US
dc.date.accessioned2009-01-28T16:17:32Z-
dc.date.available2009-01-28T16:17:32Z-
dc.date.issued1999en_US
dc.identifier.urihttp://hdl.handle.net/10419/20880-
dc.description.abstractWe estimate a Dynamic Programming model of the decision between continuing schoolingor entering the labor market using a panel from the National Longitudinal Survey (NLSY).The model, set in an expected utility framework (with a power utility function), fits data onboth schooling attainments and wage very well. We find a degree of relative risk aversionmuch smaller than usually found in the finance literature (around 0.6) and a subjectiveannual discount rate between 4\% and 5\%. Various simulations indicate that schoolingattainments are elastic with respect to the return to college education and, to a lesser extent,with respect to measured ability (Armed Forces Qualification Test scores) but inelastic withrespect to household characteristics (especially household income). The ``true''intergenerational correlation between schooling attainments and parents' education (afterconditioning on observed and unobserved ability) is found to be quite low. Finally, ourestimates of the return to schooling indicate strong returns to high school graduation and aclear evidence of a positive correlation between the utility of attending school andunobserved labor market ability (ability bias). Estimates of the return to schooling which takeinto account the ability bias are found to be between 25% and 30% smaller than thoseobtained ignoring it.en_US
dc.language.isoengen_US
dc.publisher|aInstitute for the Study of Labor (IZA) |cBonnen_US
dc.relation.ispartofseries|aIZA Discussion paper series |x43en_US
dc.subject.jelJ3en_US
dc.subject.jelJ2en_US
dc.subject.ddc330en_US
dc.subject.keywordDynamic Programmingen_US
dc.subject.keywordReturns to Educationen_US
dc.subject.keywordRisk Aversionen_US
dc.subject.keywordRate of Time Preferenceen_US
dc.subject.stwBildungsertragen_US
dc.subject.stwHaushaltsökonomiken_US
dc.subject.stwBildungsinvestitionen_US
dc.subject.stwZeitpräferenzen_US
dc.subject.stwSozialstrukturen_US
dc.subject.stwSchätzungen_US
dc.subject.stwTheorieen_US
dc.subject.stwUSAen_US
dc.titleHousehold Characteristics, Ability and Education: Evidence´ from a Dynamic Expected Utility Modelen_US
dc.typeWorking Paperen_US
dc.identifier.ppn830212426en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-

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