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ERIC Number: EJ721752
Record Type: Journal
Publication Date: 2005-Dec
Pages: 21
Abstractor: Author
Reference Count: 34
ISBN: N/A
ISSN: ISSN-0964-5292
Actual and Potential Returns to Schooling in Spain
Prieto, Carmen Garcia; Roman, Angel Martin; Dominguez, Carlos Perez
Education Economics, v13 n4 p387-407 Dec 2005
The returns to formal schooling in Spain are estimated in this paper. The main difference between this and previous papers on this subject is that, here, a distinction is made between the increase in the workers' potential maximum wage due to schooling and the actual registered increase. This difference (or underpayment) can be justified on the basis of job search theory. We use the stochastic frontiers technique because it allows the estimation of variables (such as the potential wage) that cannot be directly observed. One of the main results of this paper is that formal schooling clearly increases a worker's potential maximum wage. This increase is particularly noticeable for those workers who have completed at least a five-year university program. It has also been estimated that schooling increases the degree of underpayment, which is also quite relevant in the case of long-term university education. In spite of this, the effect of formal schooling on actual wages is clearly positive. The following are appended: (1) Likelihood Function and Technical Details; (2) Description of the Variables Used in the Estimation and of the Spanish Education System; and (3) Complete Estimations. (Contains 2 tables and 2 figures.)
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Publication Type: Journal Articles; Reports - Evaluative
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Identifiers - Location: Spain