Unobserved heterogeneity and risk in wage variance: does schooling provide earnings insurance?
We apply a recently proposed method to disentangle unobserved heterogeneity from risk in returns to education. We replicate the original study on US men and extend to US women, UK men and German men. Most original results are not robust. A college education cannot universally be considered an insurance against unpredictabillity of wages. One conclusion is unequivocally confirmed: uncertainty strongly dominates unobserved heterogeneity.
Published abstract reprinted by permission of the copyright owner.
Authors: Mazza, Jacopo; Van Ophem, Hans; Hartog, Joop
Published: Bonn, Germany, IZA, 2011
Resource type: Report, paper or authored book
Physical description: 31 p.
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