This paper provides estimates of the private financial return to education based on a large and long panel of monozygotic (MZ) and dizygotic (DZ) twins. Since the data is a long panel we can address how returns have changed over time. The fact that we have both MZs and DZs allows us to decompose changes in the variation in wages into returns to education, returns to unobservable skills, measurement error and selection into education. We show that the rising inequality, which we observe in the raw data, is largely due to rising returns to observable skills. In addition the work addresses measurement error in schooling and the endogeneity of within twin schooling differences.
Presented by:
Ian Walker (Department of Economics, University of Warwick)
Date & time:
November 26, 2007 4:00 pm - November 26, 2007 12:00 am
External seminars home