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Increasing Returns to Education: Theory and Evidence

Booth, AL and Coles, M and Gong, X (2006) Increasing Returns to Education: Theory and Evidence. UNSPECIFIED. Australian National University, Centre for Economic Policy Research, Discussion Papers.

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Abstract

We model educational investment and labor supply in a competitive economy with home and market production. Heterogeneous workers are assumed to have different productivities both at home and in the workplace. We show that there are increasing returns to education at the labor market participation margin, and that these depend directly on the elasticity of labor supply with respect to wages. Thus the increasing returns to education problem will be most relevant for women or other types with large enough home productivity. We estimate a three equation recursive model of working hours, wages and years of schooling, and find empirical support for the main predictions of the model.

Item Type: Monograph (UNSPECIFIED)
Uncontrolled Keywords: returns to education; home production; labor supply
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 18 Jul 2012 12:22
Last Modified: 17 Aug 2017 18:10
URI: http://repository.essex.ac.uk/id/eprint/3124

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