Returns to education and wage equations |
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| Authors: | Pedro Telhado Pereira Pedro Silva Martins |
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| Institution: | 1. Universidade da Madeira, Campus da Penteada , Madeira, Portugal;2. University of St Andrews, Department of Economics, University of Warwick , Coventry, CV4 7AL, UK |
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| Abstract: | 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. |
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