Returns to Education and Occupation Choices

نویسنده

  • Jinwen Xu
چکیده

This paper examines how returns to education are related to occupation choices. Specifically, I investigate the returns to attending a two-year college and a four-year college and how these returns to education differ from a blue-collar occupation to a white-collar occupation. To address the endogenous education and occupation choices, I use a finite mixture model. I show how the finite mixture model can be nonparametrically identified by using test scores and variations in wages across occupations over time. Using data taken from the National Longitudinal Survey of Youth (NLSY) 1979, I estimate a parametrically specified model and find that returns to education are occupation specific. Specifically, a two-year college attendance enhances blue-collar wages by 24% and white-collar wages by 17% while a four-year college attendance increases blue-collar wages by 23% and white-collar wages by 30%.

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تاریخ انتشار 2014