Scandinavian Working Papers in Economics
Umeå Economic Studies,
Umeå University, Department of Economics
No 691: The Role of Ability in Estimating the Returns to College Choice: New Swedish Evidence
Kent Eliasson ()
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Kent Eliasson: National Institute for Working Life, Postal: SE-831 40 Östersund, Sweden
Abstract: This paper examines the effect on earnings of graduating from five different college groups. The study is based on an administrative data set unusually rich in terms of school grades, parental characteristics and other attributes. Contrary to most previous Swedish research, we find no systematic differences in estimated earnings between the college categories. This finding holds for all college graduates, for men and women separately and for graduates in two specific fields of education. The results indicate that an estimator of the earnings effects of college choice that does not properly adjust for ability is likely to be substantially biased.
Keywords: College choice; ability; earnings; selection on observables
34 pages, September 11, 2006
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