Working Paper: NBER ID: w24160
Authors: Jared Ashworth; Joseph Hotz; Arnaud Maurel; Tyler Ransom
Abstract: This paper investigates the wage returns to schooling and actual early work experiences, and how these returns have changed over the past twenty years. Using the NLSY surveys, we develop and estimate a dynamic model of the joint schooling and work decisions that young men make in early adulthood, and quantify how they affect wages using a generalized Mincerian specification. Our results highlight the need to account for dynamic selection and changes in composition when analyzing changes in wage returns. In particular, we find that ignoring the selectivity of accumulated work experiences results in overstatement of the returns to education.
Keywords: Wage Returns; Schooling; Work Experience; NLSY; Cohorts
JEL Codes: C33; I21; I26; J22; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| selectivity of accumulated work experiences (J24) | overstatement of the returns to education (I26) |
| accumulated work experiences (J24) | returns to education (I26) |
| in-school work experience (I23) | future wages (J31) |
| high school work experience (I23) | future wages (J31) |
| full-time work experience (J29) | returns (Y60) |
| part-time work experience (J22) | returns (Y60) |
| cognitive skills (G53) | returns (Y60) |
| non-cognitive skills (D91) | returns (Y60) |
| changes in returns to schooling and work experiences (J24) | skill prices, composition, and selection effects (J24) |