Download This PaperThe Wage Return to Education: What Hides Behind the Least Squares Bias?
9 Pages Posted: 21 Feb 2015
Abstract
This paper combines the approach by Guimarães and Portugal (2010) with the methodology of Gelbach (2015) to investigate the determinants of the least squares bias of the wage return to education. We find that disregarding individual fixed effects is highly problematic, accounting for 95% of the bias. In contrast, disregarding firm fixed effects has marginal consequences.
Keywords: wages, education, least squares
JEL Classification: I21, J31
Suggested Citation: Suggested Citation
Andini, Corrado and Andini, Corrado, The Wage Return to Education: What Hides Behind the Least Squares Bias?. IZA Discussion Paper No. 8855, Available at SSRN: https://ssrn.com/abstract=2568071 or http://dx.doi.org/10.2139/ssrn.2568071
Corrado Andini (Contact Author)
IZA Institute of Labor Economics
P.O. Box 7240
Bonn, D-53072
Germany
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