Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond / James J. Heckman, Lance J. Lochner, Petra E. Todd.

Format:

Book

Author/Creator:

Heckman, James J.

Contributor:

National Bureau of Economic Research.

Lochner, Lance J.

Todd, Petra E.

Series:

Working Paper Series (National Bureau of Economic Research) no. w11544.

NBER working paper series no. w11544

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Earnings Functions, Rates of Return and Treatment Effects

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2005.

Summary:

This paper considers the interpretation of "Mincer rates of return." We test and reject the Mincer model. It fails to track the time series of true returns. We show how repeated cross section and panel data improves the ability of analysts to estimate the ex ante and ex post marginal rate of returns. Accounting for sequential revelation of information calls into question the validity of the internal rate of return as a tool for policy analysis. The large estimated psychic costs of schooling found in recent work helps to explain why persons do not attend school even though the financial rewards for doing so are high. We present methods for computing distributions of ex post and ex ante returns.

Notes:

Print version record

August 2005.