文章基本信息

标题：Life Cycle Earnings, Education Premiums and Internal Rates of Return
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作者：Manudeep Bhuller ; Magne Mogstad ; Kjell G. Salvanes 等
期刊名称：Discussion Papers / Norwegian School of Economics and Business Administration
印刷版ISSN：0804-6824
出版年度：2014
卷号：2014
出版社：Bergen
摘要：What do the education premiums look like over the life cycle? What is theimpact of schooling on lifetime earnings? How does the internal rate of returncompare with opportunity cost of funds? To what extent do progressive taxesattenuate the incentives to invest in education? This paper exploits Norwegianpopulation panel data with nearly career long earnings histories to answer theseimportant questions. We provide a detailed picture of the causal relationshipbetween schooling and earnings over the life cycle, following individuals overtheir working lifespan. To account for endogeneity of schooling, we apply threecommonly used identification strategies. Our estimates show that additionalschooling gives higher lifetime earnings and steeper age-earnings profile, inline with predictions from human capital theory. These estimates imply aninternal rate of return of around 10 percent, after taking into account incometaxes and earnings-related pension entitlements. Under standard conditions,this finding suggests it was financially profitable to take additional schoolingbecause the rates of return were substantially higher than the market interestrates. By comparison, Mincer regressions understate substantially the ratesof return. We explore the reasons for this downward bias, finding that it isdriven by Mincer’s assumptions of no earnings while in school and exogenouspost-schooling employment.
关键词：Education premium; internal rate of return; life cycle earnings