ERIC Number: ED098842
Record Type: RIE
Publication Date: 1974
Reference Count: N/A
Higher Education and Earnings: College as an Investment and a Screening Device.
Taubman, Paul; Wales, Terence
In this study of the private and social rates of return to education, the differences between the incomes of college graduates and those with less eudcation are reviewed. In the analysis, it is estimated how much of a graduate's increase in income can be attributed to educationally acquired "productivity gains" and how much stems from an employer's practice of considering only degree holders for high-paying jobs. Personal characteristics, particularly mental ability and family background, are also examined for their effect on earnings. The authors find that failure to make adjustments for the influence of ability and other personal characteristics results in overstatement of the effect of education on earnings and that the extent of this overstatement does not vary greatly by level of education. They conclude that while the social rate of return to education "may or may not be higher when screening exists," the private rate of return is higher when screening exists than it would be under conditions of free entry into all jobs. (MJM)
Descriptors: Career Opportunities, College Graduates, Employment Opportunities, High School Graduates, Higher Education, Income, Individual Characteristics, Personnel Selection, Salaries, Salary Wage Differentials, Selection
McGraw-Hill Book Company, Hightstown, New Jersey 08520 ($17.50)
Publication Type: Reports - Research
Education Level: N/A
Authoring Institution: Carnegie Commission on Higher Education , Berkeley, CA.