The Economic Returns to Schooling for Italian Men: An Evaluation Based on Instrumental Variables

Brunello, Giorgio; Miniaci, Raffaele

doi:10.2139/ssrn.122128

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The Economic Returns to Schooling for Italian Men: An Evaluation Based on Instrumental Variables

29 Pages Posted: 24 Sep 1998

See all articles by Giorgio Brunello

Giorgio Brunello

University of Padua - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA)

Raffaele Miniaci

University of Brescia - Department of Economics and Management

Date Written: November 1997

Abstract

We study the relationship between (log) current earnings and educational levels in Italy. In line with other international evidence, we find that OLS underestimates the marginal return to additional education. When the endogeneity of educational choice is taken into account, the marginal return from one additional year in junior high school increases from 3.2 to 5 percent. Similarly, the marginal return from one additional year in secondary school or in college increases respectively from 3.4 to 4.2 percent and from 6.4 to 7.2 percent. Using longitudinal data, we also find that individuals of the same age with higher education experience faster earnings growth. Hence, there is evidence that wage differentials by education widen as individuals grow older.

JEL Classification: J24, J31

Suggested Citation: Suggested Citation

Brunello, Giorgio and Miniaci, Raffaele, The Economic Returns to Schooling for Italian Men: An Evaluation Based on Instrumental Variables (November 1997). Available at SSRN: https://ssrn.com/abstract=122128 or http://dx.doi.org/10.2139/ssrn.122128