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ERIC Number: EJ944399
Record Type: Journal
Publication Date: 2011-Dec
Pages: 14
Abstractor: As Provided
Reference Count: N/A
ISSN: ISSN-0272-7757
Returning to School for Higher Returns
Park, Seonyoung
Economics of Education Review, v30 n6 p1215-1228 Dec 2011
On the basis of those respondents in the National Longitudinal Survey of Youth (NLSY) who change jobs with an intervening period of education reinvestment, the conventional assumption of linearity of log wages in years of schooling is strongly rejected: a typical reinvestment for the 1980 through 1993 period is associated with a rise of about 3.5 percentage points in the estimated return to an additional year of schooling. The estimated marginal rate of return generally rises in the former education level, and reaches the maximum at 15 years of the former level (therefore 16 years of education after reinvestment), where an additional year of investment is associated with a rise in real hourly rate of pay by approximately 20%. Evidence also shows that, while the level of individuals' risk tolerance affects significantly the probability of returning to school, correcting for sample selectivity makes little difference in the results. Findings in the current paper survive a variety of robustness tests. The current cohort-based evidence is more helpful than existing evidence from cross-sectional data to individuals making schooling decisions. (Contains 6 tables and 1 figure.)
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Publication Type: Journal Articles; Reports - Research
Education Level: Adult Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Identifiers - Assessments and Surveys: National Longitudinal Survey of Youth