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Returns to education and wage equations

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The paper shows why considering a number of education-dependent covariates in a wage equation decreases the coefficient of education in that equation. This result is illustrated empirically with a meta-analysis for Portugal. The education coefficient decreases when covariates are used that can be considered post-education decisions; on the other hand, it is independent of sample size, tenure and whether hourly or monthly wages are used. These results support the use of a simple specification of the Mincer equation for the study of the total returns to education.

Document Type: Research Article


Affiliations: 1: Universidade da Madeira Campus da Penteada Madeira Portugal 2: University of St Andrews Department of Economics, University of Warwick Coventry CV4 7AL UK

Publication date: April 10, 2004

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