Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192648 
Year of Publication: 
2011
Series/Report no.: 
Discussion Papers No. 666
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
This paper uses a unique data set with nearly career-long earnings histories to provide evidence on the returns to schooling in current and lifetime earnings. We use these results to assess the importance of life-cycle bias in earnings regressions using current earnings as a proxy for lifetime earnings. To account for the endogeneity of schooling, we apply three commonly used identification strategies. Our estimates demonstrate a strong life-cycle bias, often exceeding the bias from assuming that schooling is exogenous. We further explore the problems caused by life-cycle bias in research on the economic returns to schooling, and discuss possible remedies.
Subjects: 
Returns to schooling
life-cycle bias
lifetime earnings
current earnings
errors-in-variables model
JEL: 
J24
J31
Document Type: 
Working Paper

Files in This Item:
File
Size
201.36 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.