Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/20880 
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dc.contributor.authorBelzil, Christianen
dc.contributor.authorHansen, Joergenen
dc.date.accessioned2009-01-28T16:17:32Z-
dc.date.available2009-01-28T16:17:32Z-
dc.date.issued1999-
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
dc.language.isoengen
dc.publisher|aInstitute for the Study of Labor (IZA) |cBonnen
dc.relation.ispartofseries|aIZA Discussion Papers |x43en
dc.subject.jelJ3en
dc.subject.jelJ2en
dc.subject.ddc330en
dc.subject.keywordDynamic Programmingen
dc.subject.keywordReturns to Educationen
dc.subject.keywordRisk Aversionen
dc.subject.keywordRate of Time Preferenceen
dc.subject.stwBildungsertragen
dc.subject.stwHaushaltsökonomiken
dc.subject.stwBildungsinvestitionen
dc.subject.stwZeitpräferenzen
dc.subject.stwSozialstrukturen
dc.subject.stwSchätzungen
dc.subject.stwTheorieen
dc.subject.stwUSAen
dc.titleHousehold Characteristics, Ability and Education: Evidence´ from a Dynamic Expected Utility Model-
dc.typeWorking Paperen
dc.identifier.ppn830212426en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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