Learning about heterogeneity in returns to schooling

Gary Koop, Justin L. Tobias

Research output: Contribution to journalArticlepeer-review

24 Citations (Scopus)
47 Downloads (Pure)

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.
Original languageEnglish
Pages (from-to)827-849
Number of pages23
JournalJournal of Applied Econometrics
Volume19
Issue number7
DOIs
Publication statusPublished - 2004

Keywords

  • economics
  • econometrics
  • statistics
  • finance
  • schoolong
  • bayesian analysis

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