- Select From The Drop Down Menus The Mincer Earnings Regression Is Often Used To Estimate The Return To Schooling And Ret 1 (71.39 KiB) Viewed 14 times
internal rate of return | rate of return
to alternatives investments)
Gap 2 (unobserved preferences for schooling |
unobserved productive characteristics |
labor supply preferences)
Gap 3 (earnings return to labor supply |
returns to experience | returns to
signaling | earnings returns to unobserved
productive characteristics)
Gap 4 (reservation wage |
ability | labor supply elasticity
| hours worked/nonlabor income)
Gap 5 (asymmetric information | that
earnings rise with education | earning differences
between individuals with the same productivity)
Gap 6 (productive |
unproductive)
Gap 7 (negative | zero |
positive)
Gap 8 (difference in human capital |
difference in (intrinsic) ability or productivity
| difference in discount rates)
Select from the drop-down menus The Mincer earnings regression is often used to estimate the return to schooling and returns to other characteristics such as work experience. Mincer's earnings equation derives from the human capital model and he has shown that the coefficient (rho) of years of schooling (S) in his earnings regression captures the [Select] Estimating the causal impact of education on earnings, however, is challenging. If individuals differ in [Select) * , we might be confusing earnings returns to schooling with [Select] 4. One example of such a characteristic is Select] 4. Distinguishing between the human capital model and the signalling model using observational data is also challenging. That is because both models predict Select) 4. In Spence's pure signalling model (as discussed in class) where education is [Select ] , the true return to schooling is [Select] . Earnings differences in this model are due to [Select]