Picture of scraped petri dish

Scrape below the surface of Strathprints...

Explore world class Open Access research by researchers at the University of Strathclyde, a leading technological university.

Explore

Learning about heterogeneity in returns to schooling

Koop, G.M. and Tobias, J. (2004) Learning about heterogeneity in returns to schooling. Journal of Applied Econometrics, 19 (7). pp. 827-849. ISSN 0883-7252

[img]
Preview
PDF (strathprints006913.pdf)
strathprints006913.pdf

Download (295kB) | Preview

Abstract

Using data from the National Longitudinal Survey of Youth (NLSY) we introduce and estimate various Bayesian hierarchical models that investigate the nature of unobserved heterogeneity in returns to schooling. We consider a variety of possible forms for the heterogeneity, some motivated by previous theoretical and empirical work and some new ones, and let the data decide among the competing specifications. Empirical results indicate that heterogeneity is present in returns to education. Furthermore, we find strong evidence that the heterogeneity follows a continuous rather than a discrete distribution, and that bivariate normality provides a very reasonable description of individual-level heterogeneity in intercepts and returns to schooling.