Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/71481 
Year of Publication: 
2004
Series/Report no.: 
IFS Working Papers No. 04/19
Publisher: 
Institute for Fiscal Studies (IFS), London
Abstract: 
This paper uses cross section data to investigate whether the returns to education vary with the level of ability. Using a measure of cognitive ability based on tests taken at ages 7 and 11 we find, unlike most of the existing literature, clear evidence that the return to schooling is lower for those with higher ability indicating that education can act as a substitute for observed ability. We also estimate quantile regression functions to examine how the return to schooling varies across the conditional distribution of earnings. The results show that the return is lower for higher quantiles, suggesting that education is also a substitute for unobserved ability.
Subjects: 
earnings
education
ability
JEL: 
J31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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