Educational Expansion and its Heterogeneous Returns for Wage Workers


 Mercy Parker
 1 years ago
 Views:
Transcription
1 Dscusson Paper No Educatonal Expanson and ts Heterogeneous Returns for Wage Workers Mchael Gebel and Fredhelm Pfeffer
2 Dscusson Paper No Educatonal Expanson and ts Heterogeneous Returns for Wage Workers Mchael Gebel and Fredhelm Pfeffer Download ths ZEW Dscusson Paper from our ftp server: ftp://ftp.zew.de/pub/zewdocs/dp/dp07010.pdf De Dscusson Papers denen ener möglchst schnellen Verbretung von neueren Forschungsarbeten des ZEW. De Beträge legen n allenger Verantwortung der Autoren und stellen ncht notwendgerwese de Menung des ZEW dar. Dscusson Papers are ntended to make results of ZEW research promptly avalable to other economsts n order to encourage dscusson and suggestons for revsons. The authors are solely responsble for the contents whch do not necessarly represent the opnon of the ZEW.
3 Non techncal summary Ths paper examnes the evoluton of returns to educaton n the West German labour market n the perod Graduates from the perod of educatonal expanson n the 1960s and 70s entered the labour market durng the perod of observaton. Wth a lag, ths educatonal expanson contrbuted to skll upgradng of the labour force. Our paper tres to contrbute emprcally to the queston, whether ths upgradng of schoolng devaluated ts monetary returns n the labour market n the longer run. Based on data from the German SocoEconomc Panel (GSOEP) we estmate returns to educaton over the past twenty years n West Germany dfferentated by socoeconomc characterstcs to take nto account demographc factors and the rse n female labour market partcpaton. A major challenge for emprcal research on returns to educaton s that school choce nvolves complex decson processes. For nstance, students may select themselves nto secondary or post secondary educaton based on unobserved factors lke ablty, preferences, and parental household ncome. Students may choose to go to unversty because of ther hgh sklls and abltes. Students from a poor household may leave the educatonal system earler because of fnancal constrants. As a result presumably there wll be no sngle effect of an educatonal choce on wages but rather a whole dstrbuton of such effects,.e. returns vary across ndvduals. In order to tackle these ssues we apply two estmaton methods. On the one hand, Wooldrdge s (2004) approach uses a set of observable control varables. On the other hand, Garen s (1984) control functon approach requres an nstrumental varable that nfluences the educatonal decsons but not the wage outcome. For the populaton of workers from the GSOEP, we fnd that both approaches produce estmates of average returns to educaton that decrease untl the late 1990s and ncrease sgnfcantly afterwards. Accordng to the Wooldrdge approach, returns to one addtonal year of educaton fell from 6.5 percent n 1984 to 4.9 percent n From 1998 onwards, we fnd ncreasng returns to educaton reachng a new local maxmum of 6.4 percent n 2002 whch s just below the overall maxmum n Regardng the gender aspects, the average returns to educaton seem to have been larger for women durng the 1980s and early 1990s. However, the gap decreases over tme whch may be a consequence of ncreased partcpaton of women. Furthermore, we fnd that the so called baby boomer cohort (workers born between 1958 and 1965) has the lowest average return to educaton compared to the cohort before and the one thereafter (the former s charactersed by lower and the latter s charactersed by sharply decreasng cohort szes). However, accordng to our estmates the effect exsts only at young ages and dsappears when employees become older.
4 Educatonal Expanson and ts Heterogeneous Returns for Wage Workers Mchael Gebel* and Fredhelm Pfeffer** * Unversty of Mannhem, MZES ** Unversty of Mannhem, ZEW Mannhem Abstract: The paper examnes the evoluton of returns to educaton n the West German labour market over the last two decades. Durng ths perod, graduates from the perod of educatonal expanson n the sxtes and seventes entered the labour market and an upgradng of the skll structure took place. In order to tackle the ssues of endogenety of schoolng and ts heterogeneous returns we apply two estmaton methods: Wooldrdge s (2004) approach that reles on condtonal mean ndependence and Garen s (1984) control functon approach that requres an excluson restrcton. For the populaton of workers from the GSOEP, we fnd that both approaches produce estmates of average returns to educaton that decrease untl the late 1990s and ncrease sgnfcantly afterwards. In the observaton perod, the gender gap n returns to educaton seems to vansh. Furthermore, we fnd that the so called baby boomer cohort has the lowest average return to educaton n young ages. However, ths effect dsappears when they become older. Keywords: Educatonal expanson, correlated random coeffcent model, heterogeneous returns to educaton, condtonal mean ndependence. JELclassfcaton: J21, J24, J31 Acknowledgements: Fredhelm Pfeffer acknowledges fnancal support from the German Scence Foundaton under grants PF 331/2 ( Mcroeconometrc Methods to Assess Heterogeneous Returns to Educaton ) and PF 331/3 ( Wages, RentSharng and Collectve Wage Barganng ). For constructve dscussons we would lke to thank Andreas Ammermüller, Gunhld Berg, Mla Beyer, Kathrn Göggel, Wnfred Pohlmeer and Stephan Lothar Thompsen. All remanng errors are ours. Correspondng author: Fredhelm Pfeffer, Centre for European Economc Research, P.O. Box , D Mannhem. Tel.: , Emal:
5 1 Introducton In Germany, a major expanson of post secondary educaton occurred durng the 1960s and 70s. For nstance, n the year 2005, 40 percent of the Germans n the age group of 25 to 30 held an upper secondary degree, compared to 23 percent of the 50 to 55 years old (Mcrocensus data, Statstsches Bundesamt, 2006). Even though ths was a moderate expanson from an nternatonal perspectve (Müller and Wolbers, 2003), t shares common goals. Among others, the expanson was ssued to enhance ndvdual wellbeng and equalty of educatonal opportunty. A number of studes ndcate that educatonal nequaltes by socal background have decreased n recent decades n Germany (Müller and Haun, 1994; Henz and Maas, 1995; Schmpl Nemanns 2000) even though t seems as f the amount of educatonal nequalty was stll hgh (Dustmann 2004). Despte of an mpressve amount of emprcal research (see secton 2 below) the longer run labour market mpacts of educatonal expanson have not been studed systematcally so far. Ths s somewhat surprsng gven the ntensve dscusson of for nstance the negatve mpact of early trackng n the German educatonal system on the dstrbuton of educatonal outcomes (see Schuetz et al., 2005). Students of the perod of educatonal upgradng entered the labour market later on and sgnfcantly rased the qualfcaton structure of the workforce. For nstance, n our sample of workers from West Germany, extracted from the German Soco Economc Panel (GSOEP), average years of schoolng ncreased from 11.2 years n 1984 to 12.3 years n Our paper tres to contrbute emprcally to the queston, whether the upgradng of schoolng devaluated ts monetary returns n the labour market n the longer run. We estmate heterogeneous returns to educaton over the past twenty years n West Germany dfferentated by socoeconomc characterstcs to take nto account demographc factors and the rse n female labour market partcpaton. Economsts are nterested n the nfluence of educaton on varous socoeconomc outcome varables, among them wages and unemployment rsk. To assess these returns to educaton, selectvty nto hgher educaton durng an expanson s of consderable nterest. The level of educaton s generally chosen n a complex choce process (Card, 1999). Factors such as preferences, ablty, fnancal constrants or dfferences n the qualty of schools are usually unobserved by the researcher. If ndvduals selfselect nto educaton based on unobserved factors, ths creates an endogenety problem when estmatng returns to educaton snce the sample of ndvduals who make each schoolng choce wll not be random (Wlls and Rosen, 1979). Furthermore, when estmatng the standard Mnceran wage equaton t s usually assumed that the return to schoolng s homogenous,.e. constant across ndvduals, though observed and unobserved factors can lead to heterogenety n returns,.e. returns vary across ndvduals. Thus, t follows that there s no sngle ef 1
6 fect of educaton but rather a whole dstrbuton of ndvdual effects (among others see Blundell et al., 2005; Heckman et al., 2006). A sgnfcant part of the recent German lterature s concerned wth varous data and methodologcal aspects of estmatng returns to educaton n the presence of selectvty and heterogenety (for recent surveys see Jochmann and Pohlmeer, 2004, Flossmann and Pohlmeer, 2006). Estmates for homogenous or constant returns to educaton for Germany reveal values between 5 and 14 percent, dependng on the nstruments used, whereas the average treatment effect of schoolng has been estmated to be 8.9 percent for West German males n 1998 (Maer et al., 2004). In ths paper we try to contrbute to the lterature on educatonal expanson and ts long run and heterogeneous returns. Our contrbuton s threefold. Frst, we nvestgate the evoluton of heterogeneous returns to educaton n the labour market n the twenty year perod from 1984 to The emprcal assessment s based on data from the German SocoEconomc Panel (GSOEP). Second, we take the endogenety and selectvty of school choce nto account. A correlated random coeffcent model s employed where the explanatory varable year of schoolng s measured as a contnuous treatment varable whch can be correlated wth unobserved heterogenety. Identfcaton s based on dfferent assumptons. On the one hand, followng Wooldrdge (2004) we dentfy the average return to educaton va condtonal mean ndependence assumptons. On the other hand, we mplement a control functon approach followng Garen (1984) whch uses excluson restrctons to control for selecton on unobservable heterogenety. Thrd, the returns to educaton n West Germany are dfferentated by demographc characterstcs to take nto account effects nduced by female labour force partcpaton and the rse of newborns untl the sxtes and ts declne afterwards. Our fndngs based on Wooldrdge s (2004) condtonal mean ndependence and Garen s (1984) control functon approach are that both approaches produce estmates of average returns to educaton that decrease untl the late 1990s and ncrease sgnfcantly afterwards. Usng Wooldrdge s approach, our results vary between 4.9 and 6.5 percent for the average partal effect of an addtonal year of schoolng, whch seems to be at the lower end of prevous fndngs (Flossmann and Pohlmeer, 2006). Regardng the gender aspects, the average returns to educaton seem to have been larger for women durng the 1980s and early 1990s. However, the gap decreases over tme whch may be a consequence of ncreased partcpaton of women. Furthermore, we fnd that the so called baby boomer cohort has the lowest average return to educaton compared to the cohort before and the one thereafter (the former s charactersed by lower and the latter by sharply decreasng cohort szes). Whle ths fndng s n lne wth the lterature on wages and cohort sze (Macunovch, 1999), accordng to our estmates, the effect exsts only at young ages and seems to dsappear when employees become older. 2
7 Ths paper s organzed as follows. Secton 2 dscusses factors that nfluence returns to educaton over tme. In Secton 3, we develop the dea of heterogeneous returns to educaton n a correlated random coeffcent model. We suggest dfferent mcroeconomc estmaton technques: conventonal approaches, Wooldrdge s (2004), and Garen s (1984) approach. Secton 4 descrbes the data set and varables used. Furthermore, frst descrptve results for the evoluton of educatonal attanment over tme are presented. In secton 5, we compare estmaton results dfferentated by estmaton technques, gender and cohorts over tme. Secton 6 concludes. 2. Educatonal Expanson, Wages and the Labour Market n West Germany Educatonal attanment started to ncrease n the 1960s n Germany leadng wth a lag to the upgradng of educatonal qualfcaton n the labour market. In a standard economc supply and demand labour market framework, a rsng supply of (hgh) sklled workers may nduce, ceters parbus, a declne n the returns to educaton. A related concern s that educatonal expanson may have resulted n nsttutons dggng deeper nto the dstrbuton of student abltes so that weaker students mght have been admtted to hgher educaton, leadng to a decrease n the average productvty level of hgher educated workers (for nstance, Walker and Zhu 2005). Another concern s that teachng qualty mght have fallen because educatonal nsttutons were not able to provde the necessary qualty for the rsng quanttes of students. Ths could have resulted n decreasng returns as well. Besdes of educatonal expanson there are other factors that nfluenced demand and supply condtons on German labour markets over the last two decades. Some mportant factors have been, for nstance, brth cohort szes, wage determnaton processes, ncreasng female labour market partcpaton, and skllbased technologcal change. West Germany, as well as many other western countres, experenced a demographc change due to a baby boom that peaked durng the md1960s and sharply decreasng cohort szes afterwards (see fgure A.1). Changes n the number of brths alter the supply of workers enterng the market about 20 years later,.e. n the perod that we observe n the GSOEP data. If larger brth cohorts enter the labour market and substtuton n producton s lmted between younger and older workers, ceters parbus, a downward pressure on returns to educaton for labour market entrants arses (Macunovch, 1999; Freeman, 1979). In addton, there was ferce wage competton for entrants due to unemployment rates as hgh as ten percent n Germany. Compared to entrants, ncumbent workers n Germany enjoy some protecton aganst wage competton due to, for nstance, strong unons and/or effcency wage consderatons (Franz and Pfeffer, 2006). Therefore, one mght expect decreasng returns to educaton for the baby boom cohorts and ncreasng returns to educaton for ndvduals born after 1964 when cohort 3
8 sze started to declne sharply. Because large cohorts are absorbed gradually by the labour market when experence ncreases, accordng to our expectaton, returns to educaton may have been lower manly for labour market entrants. However, as a result of skll upgradng and globalsaton the unon wage polces may have lost part of ts aggressveness. Startng around 1992/93 wage nequalty ncreased n Germany (Gernandt and Pfeffer, 2006b) combned wth rsng returns to educaton. The computer revoluton that started around 1970 changed the organsaton of labour away from routne manual tasks to nonroutne analytcal and creatve tasks (Autor et al., 2006; SptzOener, 2006). In ths process of acceleraton (Acemoglu, 2002), the demand for the hgh sklled created addtonal demand for hgh sklled workers, skll obsolescence ncreased for vocatonal sklls, but not for general ones n Germany (Ludwg and Pfeffer, 2006). These demand shfts towards analytcal sklls favoured presumably the hgh sklled and may be one addtonal reason for ncreasng returns to educaton. Another channel that nfluences labour market supply and demand condtons s female labour force partcpaton. In West Germany, the female partcpaton rate has been rsng durng the last decades, leadng to a catchngup process to men and competton for college slots and labour market postons. Based on the decreasng gendergap n educatonal attanment and labour market partcpaton, a convergence of genderspecfc returns to educaton can be expected. For nstance, Lauer and Stener (2001) report homogeneous returns to educaton around 8 percent for men and 10 percent for women n the perod from 1984 to 1997 based on the GSOEP. Ammermüller and Weber (2005) and Boockmann and Stener (2006) fnd that gender dfferences n returns to educaton seem to fade away. To sum up, we expect that supply sde factors lke educatonal expanson and ncreasng partcpaton of women lower the returns to educaton (n a ceters parbus sense) whereas supply sde factors lke decreasng cohort sze and demand sde factors lke skllbased technologcal change and workplace nnovatons ncrease the returns to educaton. In addton, the mpact of educatonal expanson on wages wll be formed by the process of wage determnaton, the regulaton of labour as well as the rate of unemployment and actve labour market polces. Over the twenty year perod of observaton, these factors have changed n West Germany and from a pror reasonng ts mpact on the returns to educaton seems to have been ambguous. Therefore, we would lke to nvestgate the evoluton of the returns to educaton after the perod of educatonal expanson n Germany dfferentated by gender and brthcohort. Furthermore, we concentrate on methodologcal ssues of endogenety of schoolng and unobserved heterogenety n returns to educaton. 4
9 3. Statstcal Model and Identfcaton 3.1. The Correlated Random Coeffcent Model As a framework for the emprcal assessment of the returns to educaton we employ the correlated random coeffcent model (Heckman and Vytlacl, 2001): ln Y = a + b S + u wth a a X + ε a = and b = b X + εb (1), where the outcome varable ln Y s log wages and the explanatory varable S s years of schoolng of ndvdual. Ths equaton may result from optmal schoolng choce where educaton s determned by ndvdual s observed and unobserved margnal benefts and the costs of schoolng (see Card, 1999). The model has an ndvdualspecfc ntercept a and slope b that may depend on observable varables X and unobservable heterogenety ε a and ε b. The heterogenety components capture nfluences from gender, famly background, age, preferences, ablty, etc. such that a and b represent random coeffcents. In addton, we do not assume that b and S are ndependent, so that a and S as well as b and S can be correlated (Wooldrdge, 2004). For example, snce ndvduals wth hgher benefts from educaton are more lkely to partcpate longer n educaton, the returns to educaton b may n general be correlated wth S f varaton n unobserved (to the econometrcan) benefts mples postve selfselecton. In ths case, the schoolng varable s nfluenced by ts own coeffcent, yeldng an endogenety problem. We are nterested n estmatng the heterogeneous effects of S on ln Y represented by b n the structural model. In ths model, the return to educaton vares across ndvduals n both, observable heterogenety n returns X and unobserved ndvdualspecfc returns to schoolng ε b. Hence, there s no sngle parameter for the return to schoolng,.e. there s a dstrbuton of effects across ndvduals. The dstrbuton of the returns to educaton can be summarzed wth the average partal effect (APE) that measures the average return for an addtonal year of educaton n the expanson process for a randomly chosen ndvdual of the populaton: ( Y S ) = E( b ) = β E ln (2) β represents the average treatment effect for the case of a contnuous treatment varable (Flossmann and Pohlmeer, 2006; Wooldrgde 2004). The earnngs equaton (1) allows the consderng of the problem of homogeneous and heterogeneous returns to educaton n a common framework. If returns to educaton are homogenous, the outcome equaton can be rewrtten as the classcal Mncertype of earnngs functon (Blundell and Costa Das, 2000): 5
10 ln Y = a X + b S + ε + u (3) a where b s the common return to educaton. Tradtonally, unobserved heterogenety enters exclusvely the ntercept of the wage equaton but not the slope coeffcent. 1 One appealng feature of our model (1) s that varaton n unobserved heterogenety affects the slope as well,.e. unobserved heterogenety nfluences the wage effect of educaton Potental Ptfalls of Conventonal Approaches When estmatng (1) by OLS, there are three potental sources of a bas due to unobservable varables nducng a nonzero correlaton between schoolng and the error term n the outcome equaton (see Blundell et al., 2005; Heckman et al., 2006). Frst, f ndvduals wth hgh absolute earnngs capacty both acqure more educaton and earn hgher wages, schoolng SB B wll be postvely correlated wth ε a (Grlches, 1977). Ths ablty bas nduces an upward bas n the estmated average return. Second, there may be a measurement error n the schoolng varable SB B nducng a downward based n the case of classcal measurement error (Grlches, 1977). Thrd, there can be a return bas f ndvduals dffer n ther relatve earnngs capacty and act upon ther comparatve advantage when choosng ther level of educaton (Wlls and Rosen, 1979). The drecton of ths bas s less clear n the case when returns are heterogeneous (Blundell et al., 2005). If returns to educaton are by defnton homogeneous, return bas s absent. The majorty of the lterature on the return to schoolng uses nstrumental varables (IV) methods to handle the endogenety problems. To ths end, the nstrumental varable has to be correlated wth schoolng and should be uncorrelated wth unobserved ndvdual earnng capactes. For nstance, Lauer and Stener (2001) estmate homogeneous returns to educaton for Germany by IVmethods usng dfferent famly background varables as nstruments. The results depend on the nstruments used. The estmated returns to educaton vary between 6.6 and 14.8 percent. Jochmann and Pohlmeer (2004) use dfferent nstruments n the case of heterogeneous returns as for example the number of sblngs, secondary school densty or the unemployment rate at graduaton. Agan, the results vary to some degree wth the chosen nstruments. However, when schoolng s correlated wth unobserved ndvdual heterogenety n returns to educaton as assumed n the correlated random coeffcent model, standard IV methods may fal (Heckman and L, 2004). In ths case, one may redefne the parameter of nterest as the Local Average Treatment Effect (LATE) n the sense of 1 Note that there mght stll be endogenety problems, f the unobserved general ndvdual earnngs capacty ε a s correlated wth SBB 6
11 Angrst et al. (1996). For a bnary treatment varable, LATE estmates the average returns to schoolng for complers,.e. ndvduals who were nduced to change ther partcpaton status by a change n the nstrument. For example, Ichno and Wnter Ebmer (1998) as well as Becker and SebernThomas (2001) estmate LATE for Germany usng dfferent famly background varables as nstruments. Snce each nstrument mples ts own LATE and the group of complers cannot be dentfed wthout further assumptons, ths may be regarded as a drawback. However, LATE s especally nterestng when school reforms are used as nstruments snce LATE measures the returns to schoolng for those who changed ther level of schoolng because of the reform. Wth ths approach, Pschke and van Wachter (2006) fnd rather low margnal returns to educaton n Germany. In our emprcal analyss, we contrast two methods that do not suffer from bases lke standard OLS and IV technques because they try to capture both heterogenety and endogenety. They rely on dfferent dentfyng assumptons: Wooldrdge s (2004) condtonal mean ndependence (CMI) approach and Garen s (1984) control functon (CF) approach Wooldrdge s (2004) Condtonal Mean Independence (CMI) Approach The frst dentfcaton strategy consdered reles heavly on condtonal moment ndependence assumptons. Followng Wooldrdge (2004), we can dentfy APE wth the followng two assumptons as far as the lnear outcome equaton (1) holds: ( Y a, b, S, X ) = E( lny a, b, S ) = a b S ( S a, b, X ) E( S X ) and Var ( S a b, X ) = Var( S X ) E ln + (4) E =, (5) where the elements of X are sutable proxy varables for the observed and unobserved heterogenety,.e. the X should be good enough predctors of S. The frst assumpton postulates that the vector X s redundant gven S and (a, b ) n the structural condtonal expectaton (4). Ths dentfcaton assumpton obvously holds snce the control varables X enter the earnngs functon through a, b, and S only (Maer et al., 2004). The second assumpton s a redundancy condton of the form that both heterogenety terms a and b are redundant n the frst two condtonal moments of the schoolng varable S condtonal on a set of covarates X. Ths latter and strongest assumpton requres a dfferentated set of varables that control suffcently for observable and unobservable heterogenety. These condtonal moment ndependence (CMI) condtons are a weaker form of condtonal ndependence assumptons (CIA) (Wooldrdge, 2002: 607). Wooldrdge (2004: 23) shows that hs CMI approach can be nterpreted n the bnary treatment case as a weghtng matchng estmator. In contrast to methods that rely on excluson restrctons lke nstrumental varable approaches and control functons, 7
12 APE s dentfed wthout any excluson restrcton. Based on assumptons (4) and (5) Wooldrdge (2004) derves the followng estmator for APE: N ˆ 1 β = ( ) ( ) S E S X lny Var S X (6) N = 1 Because ln Y, S and X are observable, one needs to estmate E(S /X ) and Var(S /X ). The dffculty arses from consstently estmatng E(S /X ) and Var(S /X ). Snce S s nonnegatve, smple lnear models have shortcomngs. Therefore, we employ a generalzed lnear model (GLM) wth a Posson dstrbutonal assumpton for years of schoolng S : E γ X ( S X ) = e γ X and Var( S X ) σ e = 2 (7) Ths specfcaton guarantees postve estmates of both condtonal mean and varance. 2 2 A consstent estmator of σ s obtaned as the mean of squared Pearson resduals. Snce analytcal standard errors have not been developed so far, standard errors of APE are bootstrapped Garen s (1984) Control Functon (CF) Approach Garen (1984) proposed a possble alternatve soluton to the random coeffcent estmaton problem  called the control functon (CF) approach  that s smlar to the twostep procedure commonly used to correct for tradtonal selectvty bas (Heckman, 1978). Whle the standard IV approach does generally not dentfy APE n the heterogeneous returns context the CF approach does. The CF approach s mplemented by smultaneously modellng both the process of educatonal attanment and the process of generatng wages. Hence, an explct model of the schoolng selecton process whch relates the rule for assgnng ndvduals to treatment to the potental treatment outcomes s requred: S c X + dz + v = wth ( v Z, X ) = 0 E (8) where both X and Z nfluence the educatonal decson and v represents an usual error component, ncorporatng unobserved components whch determne the choce of educaton. Z s an excluson restrcton,.e. t should have no correlatons wth unobserved heterogenety n the wage equaton. The error terms v, ε a and ε b are 2 Contrary to the standard varance assumpton of equalty between the condtonal varance and the mean we specfy n (7) the weaker Posson GLM varance assumpton that allows the varancemean rato to be any postve constant (Wooldrdge, 2002) 8
13 normally dstrbuted wth zero means, postve varances and are possbly correlated wth each other. 3 Followng Garen (1984) one can formulate an augmented wage equaton of the form: ln Y = a + ν S + w (9) βs + γ1ν + γ 2 where γ 1 ν and γ 2 ν S are the control functons wth γ1 = cov( ε a, ν ) var( ν ) and γ 2 = cov( ε b, ν ) var( ν ). Once these terms are ncluded n the outcome equaton (and mplctly subtracted from ts error term), the error term w has all the desrable propertes,.e. t s orthogonal to all of the regressors n the new equaton: E( w X, S, v ) = 0 (Heckman and Robb, 1985). Ths model can be estmated usng a generalzaton of the standard twostep approach. In the frst step an estmaton of the schoolng choce s used to construct the control functons that are ncluded as addtonal regressors n the augmented wage equaton n the second step. The estmated coeffcents of v and v S provde nformaton about the selecton on the unobserved absolute earnngs capacty term and about selecton on comparatve earnngs capacty, respectvely. If an ndvdual attans a hgher (lower) level of educaton than expected by our model the value of v s postve (negatve). For example, f the coeffcent γ 1 of the frst control functon s postve, ths mples that the unobserved factors that lead to educatonal overachevement (postve v ) have a postve mpact on earnngs. The sgn of the coeffcent γ 2 of the second control functon descrbes how ths effect changes for ncreasng levels of educaton. Followng the comparatve advantage hypothess (Wlls and Rosen, 1979), we would expect that γ 2 s postve,.e., those wth unexpectedly large amounts of schoolng (postve v ) tend to earn more than the others n hgher educaton (Garen, 1984). Based on ther hgher unobserved margnal returns they select nto hgher educaton accordng to ther comparatve advantage. 4. Data and Descrptve Analyss 4.1. Sample Selecton For the analyss, we use 21 waves of the German SocoEconomc Panel Study (GSOEP) that collects longtudnal representatve mcrodata on persons, households and famles on a yearly bass. GSOEP contans nformaton on varous socoeconomc factors lke educaton, employment and earnngs. In addton to annually collected nformaton, GSOEP retreves some retrospectve nformaton about fam 3 Ths trvarate normalty assumpton can be weakened to the condton that condtonal expectatons of the unobserved earnng components ε a and ε b are lnear n the resdual of the selecton equaton (Blundell et al., 2005). 9
14 ly background, among others. We nclude new samples from 1998 and Due to mssng value problems on educatonal attanment and lack of comparablty, foregnborn ndvduals were excluded from the sample. Furthermore, for the purpose of comparablty, the analyss s restrcted to West German ctzens because of economc dfferences and dscrepances n the schoolng system between West and East Germany. Selfemployed workers are excluded from the sample snce they are exposed to dfferent earnngsgeneratng mechansms. The resultng sample s restrcted to fulltme dependent workers aged between 25 and 60, defned as ndvduals workng 30 hours or more per week. After elmnatng all unts wth mssng values n any of the varables consdered we obtan a fnal sample sze that ranges from 1,535 observatons n 1984 to 3,958 n The dependent varable s the natural logarthm of real earnngs per hour worked. The real gross hourly wage s obtaned by dvdng the monthly nomnal gross wage n the month precedng the date of the ntervew by the number of hours worked. Hence, the focus les exclusvely on the drect monetary returns to educaton. For the sake of comparablty wth economc studes on monetary returns to educaton, we measure school careers n years attended rather than educatonal degrees completed. Lnearty n the earnngs equaton mples that each year of schoolng yelds an dentcal return to educaton, rrespectve of the level of educaton. GSOEP contans nformaton on the hghest completed level and type of educaton for each ndvdual. The measure of years of schoolng s derved by attachng a standard number of years to the hghest educatonal level (cp. table A.1). However, t does not necessarly reflect the actual number of years attended snce a person may need less or more than standard tme to complete her educaton. 4 As standard control varables, gender and ndvdual s age (n lnear and quadratc terms) are ncluded. We use age varables nstead of potental labour market experence because the latter mght be endogenous wth respect to schoolng. To justfy the condtonal moment ndependence assumptons we make use of a set of famly background nformaton that s covered by recall questons and that s avalable for a suffcent number of persons n each wave consdered. Famly background characterstcs should proxy for the parental nfluence on educatonal attanment and later employment carrers. In detal, we dstngush between educatonal and occupatonal socal background. The measure for parents educaton follows the CASMIN educatonal classfcaton whch has the advantage to combne nformaton on the hghest school degree and the hghest vocatonal degree of the parents (Erkson and Goldthorpe, 1992). The CASMIN categores have been summarzed n fve categores for fathers and n a dummyvarable for mother s hgher educaton (cp. table A.1). Parents educaton 4 For an analyss of the ssue of over educaton n workers from dfferent educatonal degrees see Maer et al. (2004). 10
Can Auto Liability Insurance Purchases Signal Risk Attitude?
Internatonal Journal of Busness and Economcs, 2011, Vol. 10, No. 2, 159164 Can Auto Lablty Insurance Purchases Sgnal Rsk Atttude? ChuShu L Department of Internatonal Busness, Asa Unversty, Tawan ShengChang
More informationMarginal Returns to Education For Teachers
The Onlne Journal of New Horzons n Educaton Volume 4, Issue 3 MargnalReturnstoEducatonForTeachers RamleeIsmal,MarnahAwang ABSTRACT FacultyofManagementand Economcs UnverstPenddkanSultan Idrs ramlee@fpe.ups.edu.my
More informationHOUSEHOLDS DEBT BURDEN: AN ANALYSIS BASED ON MICROECONOMIC DATA*
HOUSEHOLDS DEBT BURDEN: AN ANALYSIS BASED ON MICROECONOMIC DATA* Luísa Farnha** 1. INTRODUCTION The rapd growth n Portuguese households ndebtedness n the past few years ncreased the concerns that debt
More informationInequality and The Accounting Period. Quentin Wodon and Shlomo Yitzhaki. World Bank and Hebrew University. September 2001.
Inequalty and The Accountng Perod Quentn Wodon and Shlomo Ytzha World Ban and Hebrew Unversty September Abstract Income nequalty typcally declnes wth the length of tme taen nto account for measurement.
More informationbenefit is 2, paid if the policyholder dies within the year, and probability of death within the year is ).
REVIEW OF RISK MANAGEMENT CONCEPTS LOSS DISTRIBUTIONS AND INSURANCE Loss and nsurance: When someone s subject to the rsk of ncurrng a fnancal loss, the loss s generally modeled usng a random varable or
More informationAn Alternative Way to Measure Private Equity Performance
An Alternatve Way to Measure Prvate Equty Performance Peter Todd Parlux Investment Technology LLC Summary Internal Rate of Return (IRR) s probably the most common way to measure the performance of prvate
More informationPRIVATE SCHOOL CHOICE: THE EFFECTS OF RELIGIOUS AFFILIATION AND PARTICIPATION
PRIVATE SCHOOL CHOICE: THE EFFECTS OF RELIIOUS AFFILIATION AND PARTICIPATION Danny CohenZada Department of Economcs, Benuron Unversty, BeerSheva 84105, Israel Wllam Sander Department of Economcs, DePaul
More informationInstitute of Informatics, Faculty of Business and Management, Brno University of Technology,Czech Republic
Lagrange Multplers as Quanttatve Indcators n Economcs Ivan Mezník Insttute of Informatcs, Faculty of Busness and Management, Brno Unversty of TechnologCzech Republc Abstract The quanttatve role of Lagrange
More informationAnswer: A). There is a flatter IS curve in the high MPC economy. Original LM LM after increase in M. IS curve for low MPC economy
4.02 Quz Solutons Fall 2004 MultpleChoce Questons (30/00 ponts) Please, crcle the correct answer for each of the followng 0 multplechoce questons. For each queston, only one of the answers s correct.
More information! # %& ( ) +,../ 0 1 2 3 4 0 4 # 5##&.6 7% 8 # 0 4 2 #...
! # %& ( ) +,../ 0 1 2 3 4 0 4 # 5##&.6 7% 8 # 0 4 2 #... 9 Sheffeld Economc Research Paper Seres SERP Number: 2011010 ISSN 17498368 Sarah Brown, Aurora OrtzNúñez and Karl Taylor Educatonal loans and
More informationEvaluating the Effects of FUNDEF on Wages and Test Scores in Brazil *
Evaluatng the Effects of FUNDEF on Wages and Test Scores n Brazl * Naérco MenezesFlho Elane Pazello Unversty of São Paulo Abstract In ths paper we nvestgate the effects of the 1998 reform n the fundng
More informationTHE DISTRIBUTION OF LOAN PORTFOLIO VALUE * Oldrich Alfons Vasicek
HE DISRIBUION OF LOAN PORFOLIO VALUE * Oldrch Alfons Vascek he amount of captal necessary to support a portfolo of debt securtes depends on the probablty dstrbuton of the portfolo loss. Consder a portfolo
More informationCriminal Justice System on Crime *
On the Impact of the NSW Crmnal Justce System on Crme * Dr Vasls Sarafds, Dscplne of Operatons Management and Econometrcs Unversty of Sydney * Ths presentaton s based on jont work wth Rchard Kelaher 1
More informationStart me up: The Effectiveness of a SelfEmployment Programme for Needy Unemployed People in Germany*
Start me up: The Effectveness of a SelfEmployment Programme for Needy Unemployed People n Germany* Joachm Wolff Anton Nvorozhkn Date: 22/10/2008 Abstract In recent years actvaton of meanstested unemployment
More informationDEFINING %COMPLETE IN MICROSOFT PROJECT
CelersSystems DEFINING %COMPLETE IN MICROSOFT PROJECT PREPARED BY James E Aksel, PMP, PMISP, MVP For Addtonal Informaton about Earned Value Management Systems and reportng, please contact: CelersSystems,
More informationEducation and Family Income
Prelmnary: Comments Welcome Educaton and Famly Income Jo Blanden*, Paul Gregg** and Stephen Machn* May 2002 * Department of Economcs, Unversty College London and Centre for Economc Performance, London
More informationThe covariance is the two variable analog to the variance. The formula for the covariance between two variables is
Regresson Lectures So far we have talked only about statstcs that descrbe one varable. What we are gong to be dscussng for much of the remander of the course s relatonshps between two or more varables.
More informationReturns to Experience in Mozambique: A Nonparametric Regression Approach
Returns to Experence n Mozambque: A Nonparametrc Regresson Approach Joel Muzma Conference Paper nº 27 Conferênca Inaugural do IESE Desafos para a nvestgação socal e económca em Moçambque 19 de Setembro
More informationCausal, Explanatory Forecasting. Analysis. Regression Analysis. Simple Linear Regression. Which is Independent? Forecasting
Causal, Explanatory Forecastng Assumes causeandeffect relatonshp between system nputs and ts output Forecastng wth Regresson Analyss Rchard S. Barr Inputs System Cause + Effect Relatonshp The job of
More informationHeterogeneous Paths Through College: Detailed Patterns and Relationships with Graduation and Earnings
Heterogeneous Paths Through College: Detaled Patterns and Relatonshps wth Graduaton and Earnngs Rodney J. Andrews The Unversty of Texas at Dallas and the Texas Schools Project Jng L The Unversty of Tulsa
More informationManagement Quality, Financial and Investment Policies, and. Asymmetric Information
Management Qualty, Fnancal and Investment Polces, and Asymmetrc Informaton Thomas J. Chemmanur * Imants Paegls ** and Karen Smonyan *** Current verson: December 2007 * Professor of Fnance, Carroll School
More informationThe Development of Web Log Mining Based on ImproveKMeans Clustering Analysis
The Development of Web Log Mnng Based on ImproveKMeans Clusterng Analyss TngZhong Wang * College of Informaton Technology, Luoyang Normal Unversty, Luoyang, 471022, Chna wangtngzhong2@sna.cn Abstract.
More informationStaff Paper. Farm Savings Accounts: Examining Income Variability, Eligibility, and Benefits. Brent Gloy, Eddy LaDue, and Charles Cuykendall
SP 200502 August 2005 Staff Paper Department of Appled Economcs and Management Cornell Unversty, Ithaca, New York 148537801 USA Farm Savngs Accounts: Examnng Income Varablty, Elgblty, and Benefts Brent
More informationModule 2 LOSSLESS IMAGE COMPRESSION SYSTEMS. Version 2 ECE IIT, Kharagpur
Module LOSSLESS IMAGE COMPRESSION SYSTEMS Lesson 3 Lossless Compresson: Huffman Codng Instructonal Objectves At the end of ths lesson, the students should be able to:. Defne and measure source entropy..
More informationDoes Higher Education Enhance Migration?
DISCUSSION PAPER SERIES IZA DP No. 7754 Does Hgher Educaton Enhance Mgraton? Mka Haapanen Petr Böckerman November 2013 Forschungsnsttut zur Zukunft der Arbet Insttute for the Study of Labor Does Hgher
More informationMilitary Conscription and University Enrolment: Evidence from Italy
DISCUSSION PAPER SERIES IZA DP No. 4212 Mltary Conscrpton and Unversty Enrolment: Evdence from Italy Gorgo D Petro June 2009 Forschungsnsttut zur Zukunft der Arbet Insttute for the Study of Labor Mltary
More informationUnderstanding the Impact of Marketing Actions in Traditional Channels on the Internet: Evidence from a Large Scale Field Experiment
A research and educaton ntatve at the MT Sloan School of Management Understandng the mpact of Marketng Actons n Tradtonal Channels on the nternet: Evdence from a Large Scale Feld Experment Paper 216 Erc
More informationGeneral or Vocational? Evidence on School Choice, Returns, and Sheep Skin Effects from Egypt 1998
Twentyffth Annual Meetng of The Mddle East Economc Assocaton (MEEA) Alled Socal Scence Assocatons Phladelpha, Pennsylvana January 79, 2005 General or Vocatonal? Evdence on School Choce, Returns, and
More informationIs There A Tradeoff between EmployerProvided Health Insurance and Wages?
Is There A Tradeoff between EmployerProvded Health Insurance and Wages? Lye Zhu, Southern Methodst Unversty October 2005 Abstract Though most of the lterature n health nsurance and the labor market assumes
More information1. Measuring association using correlation and regression
How to measure assocaton I: Correlaton. 1. Measurng assocaton usng correlaton and regresson We often would lke to know how one varable, such as a mother's weght, s related to another varable, such as a
More informationAnalysis of Premium Liabilities for Australian Lines of Business
Summary of Analyss of Premum Labltes for Australan Lnes of Busness Emly Tao Honours Research Paper, The Unversty of Melbourne Emly Tao Acknowledgements I am grateful to the Australan Prudental Regulaton
More informationExhaustive Regression. An Exploration of RegressionBased Data Mining Techniques Using Super Computation
Exhaustve Regresson An Exploraton of RegressonBased Data Mnng Technques Usng Super Computaton Antony Daves, Ph.D. Assocate Professor of Economcs Duquesne Unversty Pttsburgh, PA 58 Research Fellow The
More informationDiscussion Paper No. 09031. Young and Innocent. International Evidence on Age Effects Within Grades on School Victimization in Elementary School
Dscusson Paper No. 09031 Young and Innocent Internatonal Evdence on Age Effects Wthn Grades on School Vctmzaton n Elementary School Andrea M. Mühlenweg Dscusson Paper No. 09031 Young and Innocent Internatonal
More informationForecasting the Direction and Strength of Stock Market Movement
Forecastng the Drecton and Strength of Stock Market Movement Jngwe Chen Mng Chen Nan Ye cjngwe@stanford.edu mchen5@stanford.edu nanye@stanford.edu Abstract  Stock market s one of the most complcated systems
More informationCalculation of Sampling Weights
Perre Foy Statstcs Canada 4 Calculaton of Samplng Weghts 4.1 OVERVIEW The basc sample desgn used n TIMSS Populatons 1 and 2 was a twostage stratfed cluster desgn. 1 The frst stage conssted of a sample
More informationMarginal Benefit Incidence Analysis Using a Single Crosssection of Data. Mohamed Ihsan Ajwad and Quentin Wodon 1. World Bank.
Margnal Beneft Incdence Analyss Usng a Sngle Crosssecton of Data Mohamed Ihsan Ajwad and uentn Wodon World Bank August 200 Abstract In a recent paper, Lanjouw and Ravallon proposed an attractve and smple
More informationSUPPLIER FINANCING AND STOCK MANAGEMENT. A JOINT VIEW.
SUPPLIER FINANCING AND STOCK MANAGEMENT. A JOINT VIEW. Lucía Isabel García Cebrán Departamento de Economía y Dreccón de Empresas Unversdad de Zaragoza Gran Vía, 2 50.005 Zaragoza (Span) Phone: 976761000
More informationCHAPTER 14 MORE ABOUT REGRESSION
CHAPTER 14 MORE ABOUT REGRESSION We learned n Chapter 5 that often a straght lne descrbes the pattern of a relatonshp between two quanttatve varables. For nstance, n Example 5.1 we explored the relatonshp
More informationSearching and Switching: Empirical estimates of consumer behaviour in regulated markets
Searchng and Swtchng: Emprcal estmates of consumer behavour n regulated markets Catherne Waddams Prce Centre for Competton Polcy, Unversty of East Angla Catherne Webster Centre for Competton Polcy, Unversty
More informationWage inequality and returns to schooling in Europe: a semiparametric approach using EUSILC data
MPRA Munch Personal RePEc Archve Wage nequalty and returns to schoolng n Europe: a semparametrc approach usng EUSILC data Marco Bagett and Sergo Sccchtano Unversty La Sapenza Rome, Mnstry of Economc
More informationWhen Talk is Free : The Effect of Tariff Structure on Usage under Two and ThreePart Tariffs
0 When Talk s Free : The Effect of Tarff Structure on Usage under Two and ThreePart Tarffs Eva Ascarza Ana Lambrecht Naufel Vlcassm July 2012 (Forthcomng at Journal of Marketng Research) Eva Ascarza
More informationStatistical Methods to Develop Rating Models
Statstcal Methods to Develop Ratng Models [Evelyn Hayden and Danel Porath, Österrechsche Natonalbank and Unversty of Appled Scences at Manz] Source: The Basel II Rsk Parameters Estmaton, Valdaton, and
More informationTraditional versus Online Courses, Efforts, and Learning Performance
Tradtonal versus Onlne Courses, Efforts, and Learnng Performance KuangCheng Tseng, Department of Internatonal Trade, ChungYuan Chrstan Unversty, Tawan ShanYng Chu, Department of Internatonal Trade,
More informationErrorPropagation.nb 1. Error Propagation
ErrorPropagaton.nb Error Propagaton Suppose that we make observatons of a quantty x that s subject to random fluctuatons or measurement errors. Our best estmate of the true value for ths quantty s then
More informationCambodian Child s Wage Rate, Human Capital and Hours Worked Tradeoff: Simple Theoretical and Empirical Evidence for Policy Implications
GSIS Workng Paper Seres ambodan hld s Wage Rate, Human aptal and Hours Worked Tradeoff: Smple Theoretcal and Emprcal Evdence for Polcy Implcatons Han PHOUMIN Sech FUKUI No. 6 August 2006 Graduate School
More informationIDENTIFICATION AND CORRECTION OF A COMMON ERROR IN GENERAL ANNUITY CALCULATIONS
IDENTIFICATION AND CORRECTION OF A COMMON ERROR IN GENERAL ANNUITY CALCULATIONS Chrs Deeley* Last revsed: September 22, 200 * Chrs Deeley s a Senor Lecturer n the School of Accountng, Charles Sturt Unversty,
More informationMAPP. MERIS level 3 cloud and water vapour products. Issue: 1. Revision: 0. Date: 9.12.1998. Function Name Organisation Signature Date
Ttel: Project: Doc. No.: MERIS level 3 cloud and water vapour products MAPP MAPPATBDClWVL3 Issue: 1 Revson: 0 Date: 9.12.1998 Functon Name Organsaton Sgnature Date Author: Bennartz FUB Preusker FUB Schüller
More informationDo business administration studies offer better preparation for supervisory jobs than traditional economics studies?
Do busness admnstraton studes offer better preparaton for supervsory jobs than tradtonal economcs studes? ROARM2002/2E Hans Hejke, Ger Ramaekers and Catherne Rs Research Centre for Educaton and the Labour
More informationThe impact of hard discount control mechanism on the discount volatility of UK closedend funds
Investment Management and Fnancal Innovatons, Volume 10, Issue 3, 2013 Ahmed F. Salhn (Egypt) The mpact of hard dscount control mechansm on the dscount volatlty of UK closedend funds Abstract The mpact
More informationWhich Factors Determine Academic Performance of Economics Freshers?. Some Spanish Evidence
Whch Factors Determne Academc Performance of Economcs Freshers?. Some Spansh Evdence Juan J. Dolado* & Eduardo Morales** (*) Unversdad Carlos III & CEPR & IZA (**) Harvard Unversty Ths draft: October,
More informationKiel Institute for World Economics Duesternbrooker Weg 120 24105 Kiel (Germany) Kiel Working Paper No. 1120
Kel Insttute for World Economcs Duesternbrooker Weg 45 Kel (Germany) Kel Workng Paper No. Path Dependences n enture Captal Markets by Andrea Schertler July The responsblty for the contents of the workng
More informationAn Evaluation of the Extended Logistic, Simple Logistic, and Gompertz Models for Forecasting Short Lifecycle Products and Services
An Evaluaton of the Extended Logstc, Smple Logstc, and Gompertz Models for Forecastng Short Lfecycle Products and Servces Charles V. Trappey a,1, Hsnyng Wu b a Professor (Management Scence), Natonal Chao
More informationSIMPLE LINEAR CORRELATION
SIMPLE LINEAR CORRELATION Smple lnear correlaton s a measure of the degree to whch two varables vary together, or a measure of the ntensty of the assocaton between two varables. Correlaton often s abused.
More informationCulture and the Family: An Application to Educational Choices in Italy
Culture and the Famly: An Applcaton to Educatonal Choces n Italy Saggo ad Invto per la Rvsta d Poltca Economca July 2009 Paola Gulano UCLA, NBER, and IZA Abstract In ths essay we revew the assocaton between
More informationFinancial Instability and Life Insurance Demand + Mahito Okura *
Fnancal Instablty and Lfe Insurance Demand + Mahto Okura * Norhro Kasuga ** Abstract Ths paper estmates prvate lfe nsurance and Kampo demand functons usng householdlevel data provded by the Postal Servces
More informationGender differences in revealed risk taking: evidence from mutual fund investors
Economcs Letters 76 (2002) 151 158 www.elsever.com/ locate/ econbase Gender dfferences n revealed rsk takng: evdence from mutual fund nvestors a b c, * Peggy D. Dwyer, James H. Glkeson, John A. Lst a Unversty
More informationPhoenix Center Policy Paper Number 39: Internet Use and Job Search. (January 2010)
PHOENIX CENTER POLICY PAPER SERIES Phoenx Center Polcy Paper Number 39: Internet Use and Job Search T. Randolph Beard, PhD George S. Ford PhD Rchard P. Saba, PhD (January 2010), T. Randolph Beard, George
More informationHigh Correlation between Net Promoter Score and the Development of Consumers' Willingness to Pay (Empirical Evidence from European Mobile Markets)
Hgh Correlaton between et Promoter Score and the Development of Consumers' Wllngness to Pay (Emprcal Evdence from European Moble Marets Ths paper shows that the correlaton between the et Promoter Score
More informationNumber of Levels Cumulative Annual operating Income per year construction costs costs ($) ($) ($) 1 600,000 35,000 100,000 2 2,200,000 60,000 350,000
Problem Set 5 Solutons 1 MIT s consderng buldng a new car park near Kendall Square. o unversty funds are avalable (overhead rates are under pressure and the new faclty would have to pay for tself from
More informationThe Effects of Human Resource Management on Workers' Wages and Firm Productivity
The Effects of Human Resource Management on Workers' Wages and Frm Productvty ROARM2003/9E Andres de Grp, Inge Seben Research Centre for Educaton and the Labour Market Faculty of Economcs and Busness
More informationStructural Estimation of Variety Gains from Trade Integration in a Heterogeneous Firms Framework
Journal of Economcs and Econometrcs Vol. 55, No.2, 202 pp. 7893 SSN 20329652 ESSN 20329660 Structural Estmaton of Varety Gans from Trade ntegraton n a Heterogeneous Frms Framework VCTOR RVAS ABSTRACT
More informationTHE EFFECT OF PREPAYMENT PENALTIES ON THE PRICING OF SUBPRIME MORTGAGES
THE EFFECT OF PREPAYMENT PENALTIES ON THE PRICING OF SUBPRIME MORTGAGES Gregory Ellehausen, Fnancal Servces Research Program George Washngton Unversty Mchael E. Staten, Fnancal Servces Research Program
More informationUNIVERSITA CATTOLICA DEL SACRO CUORE  Milano  QUADERNI DELL ISTITUTO DI ECONOMIA DELL IMPRESA E DEL LAVORO
UNIVERSITA CATTOLICA DEL SACRO CUORE  Mlano  QUADERNI DELL ISTITUTO DI ECONOMIA DELL IMPRESA E DEL LAVORO The Wage Effect of Workng n the Publc Sector When Educaton and Sector Choces Are Endogenous:
More informationThe OC Curve of Attribute Acceptance Plans
The OC Curve of Attrbute Acceptance Plans The Operatng Characterstc (OC) curve descrbes the probablty of acceptng a lot as a functon of the lot s qualty. Fgure 1 shows a typcal OC Curve. 10 8 6 4 1 3 4
More informationCHAPTER 5 RELATIONSHIPS BETWEEN QUANTITATIVE VARIABLES
CHAPTER 5 RELATIONSHIPS BETWEEN QUANTITATIVE VARIABLES In ths chapter, we wll learn how to descrbe the relatonshp between two quanttatve varables. Remember (from Chapter 2) that the terms quanttatve varable
More informationThe Current Employment Statistics (CES) survey,
Busness Brths and Deaths Impact of busness brths and deaths n the payroll survey The CES probabltybased sample redesgn accounts for most busness brth employment through the mputaton of busness deaths,
More informationTwo Faces of IntraIndustry Information Transfers: Evidence from Management Earnings and Revenue Forecasts
Two Faces of IntraIndustry Informaton Transfers: Evdence from Management Earnngs and Revenue Forecasts Yongtae Km Leavey School of Busness Santa Clara Unversty Santa Clara, CA 950530380 TEL: (408) 5544667,
More informationADVERSE SELECTION IN INSURANCE MARKETS: POLICYHOLDER EVIDENCE FROM THE U.K. ANNUITY MARKET *
ADVERSE SELECTION IN INSURANCE MARKETS: POLICYHOLDER EVIDENCE FROM THE U.K. ANNUITY MARKET * Amy Fnkelsten Harvard Unversty and NBER James Poterba MIT and NBER * We are grateful to Jeffrey Brown, PerreAndre
More informationAn InterestOriented Network Evolution Mechanism for Online Communities
An InterestOrented Network Evoluton Mechansm for Onlne Communtes Cahong Sun and Xaopng Yang School of Informaton, Renmn Unversty of Chna, Bejng 100872, P.R. Chna {chsun,yang}@ruc.edu.cn Abstract. Onlne
More informationOn the Optimal Control of a Cascade of HydroElectric Power Stations
On the Optmal Control of a Cascade of HydroElectrc Power Statons M.C.M. Guedes a, A.F. Rbero a, G.V. Smrnov b and S. Vlela c a Department of Mathematcs, School of Scences, Unversty of Porto, Portugal;
More informationSPEE Recommended Evaluation Practice #6 Definition of Decline Curve Parameters Background:
SPEE Recommended Evaluaton Practce #6 efnton of eclne Curve Parameters Background: The producton hstores of ol and gas wells can be analyzed to estmate reserves and future ol and gas producton rates and
More informationMultiplePeriod Attribution: Residuals and Compounding
MultplePerod Attrbuton: Resduals and Compoundng Our revewer gave these authors full marks for dealng wth an ssue that performance measurers and vendors often regard as propretary nformaton. In 1994, Dens
More informationTo manage leave, meeting institutional requirements and treating individual staff members fairly and consistently.
Corporate Polces & Procedures Human Resources  Document CPP216 Leave Management Frst Produced: Current Verson: Past Revsons: Revew Cycle: Apples From: 09/09/09 26/10/12 09/09/09 3 years Immedately Authorsaton:
More informationHARVARD John M. Olin Center for Law, Economics, and Business
HARVARD John M. Oln Center for Law, Economcs, and Busness ISSN 10456333 ASYMMETRIC INFORMATION AND LEARNING IN THE AUTOMOBILE INSURANCE MARKET Alma Cohen Dscusson Paper No. 371 6/2002 Harvard Law School
More informationWORKING PAPERS. The Impact of Technological Change and Lifestyles on the Energy Demand of Households
ÖSTERREICHISCHES INSTITUT FÜR WIRTSCHAFTSFORSCHUNG WORKING PAPERS The Impact of Technologcal Change and Lfestyles on the Energy Demand of Households A Combnaton of Aggregate and Indvdual Household Analyss
More informationReturn decomposing of absoluteperformance multiasset class portfolios. Working Paper  Nummer: 16
Return decomposng of absoluteperformance multasset class portfolos Workng Paper  Nummer: 16 2007 by Dr. Stefan J. Illmer und Wolfgang Marty; n: Fnancal Markets and Portfolo Management; March 2007; Volume
More informationThe Effects of Tax Rate Changes on Tax Bases and the Marginal Cost of Public Funds for Canadian Provincial Governments
The Effects of Tax Rate Changes on Tax Bases and the Margnal Cost of Publc Funds for Canadan Provncal Governments Bev Dahlby a and Ergete Ferede b a Department of Economcs, Unversty of Alberta, Edmonton,
More informationHot and easy in Florida: The case of economics professors
Research n Hgher Educaton Journal Abstract Hot and easy n Florda: The case of economcs professors Olver Schnusenberg The Unversty of North Florda Cheryl Froehlch The Unversty of North Florda We nvestgate
More informationUnderwriting Risk. Glenn Meyers. Insurance Services Office, Inc.
Underwrtng Rsk By Glenn Meyers Insurance Servces Offce, Inc. Abstract In a compettve nsurance market, nsurers have lmted nfluence on the premum charged for an nsurance contract. hey must decde whether
More informationL10: Linear discriminants analysis
L0: Lnear dscrmnants analyss Lnear dscrmnant analyss, two classes Lnear dscrmnant analyss, C classes LDA vs. PCA Lmtatons of LDA Varants of LDA Other dmensonalty reducton methods CSCE 666 Pattern Analyss
More informationTinbergen Institute Amsterdam Keizersgracht 482 1017 EG Amsterdam The Netherlands Tel.: +31.(0)20.5513500 Fax: +31.(0)20.5513555
7, 7LQEHUJHQ,QVWLWXWH'LVFXVVLRQ3DSHU 7KH9DOXHRI+XPDQDQG6RFLDO &DSLWDO,QYHVWPHQWVIRUWKH %XVLQHVV3HUIRUPDQFHRI6WDUW XSV 1LHOV%RVPD 0LUMDPYDQ3UDDJ 5R\7KXULN *HUULWGH:LW Ã (,0%XVLQHVVDQG3ROLF\5HVHDUFK=RHWHUPHHU
More informationInequality of Opportunities in Health in France: A first pass.
HEDG Workng Paper 08/24 Inequalty of Opportuntes n Health n France: A frst pass. Alan Trannoy Sandy Tubeuf Florence Jusot Maron Devaux October 2008 http://www.york.ac.uk/res/herc/research/hedg/wp.htm Inequalty
More informationTime Series Analysis in Studies of AGN Variability. Bradley M. Peterson The Ohio State University
Tme Seres Analyss n Studes of AGN Varablty Bradley M. Peterson The Oho State Unversty 1 Lnear Correlaton Degree to whch two parameters are lnearly correlated can be expressed n terms of the lnear correlaton
More informationPSYCHOLOGICAL RESEARCH (PYC 304C) Lecture 12
14 The Chsquared dstrbuton PSYCHOLOGICAL RESEARCH (PYC 304C) Lecture 1 If a normal varable X, havng mean µ and varance σ, s standardsed, the new varable Z has a mean 0 and varance 1. When ths standardsed
More informationThe Analysis of Covariance. ERSH 8310 Keppel and Wickens Chapter 15
The Analyss of Covarance ERSH 830 Keppel and Wckens Chapter 5 Today s Class Intal Consderatons Covarance and Lnear Regresson The Lnear Regresson Equaton TheAnalyss of Covarance Assumptons Underlyng the
More informationx f(x) 1 0.25 1 0.75 x 1 0 1 1 0.04 0.01 0.20 1 0.12 0.03 0.60
BIVARIATE DISTRIBUTIONS Let be a varable that assumes the values { 1,,..., n }. Then, a functon that epresses the relatve frequenc of these values s called a unvarate frequenc functon. It must be true
More informationOn Mean Squared Error of Hierarchical Estimator
S C H E D A E I N F O R M A T I C A E VOLUME 0 0 On Mean Squared Error of Herarchcal Estmator Stans law Brodowsk Faculty of Physcs, Astronomy, and Appled Computer Scence, Jagellonan Unversty, Reymonta
More information! ## % & ( ) + & ) ) ),. / 0 ## #1#
! ## % & ( ) + & ) ) ),. / 0 12 345 4 ## #1# 6 Sheffeld Economc Research Paper Seres SERP Number: 2006010 ISSN 17498368 Pamela Lenton* The Cost Structure of Hgher Educaton n Further Educaton Colleges
More informationThe Willingness to Pay for Job Amenities: Evidence from Mothers' Return to Work
ILRRevew Volume 65 Number 2 Artcle 10 2012 The Wllngness to Pay for Job Amentes: Evdence from Mothers' Return to Chrstna Felfe Unversty of St. Gallen, chrstna.felfe@unsg.ch The Wllngness to Pay for Job
More informationChapter 8 Groupbased Lending and Adverse Selection: A Study on Risk Behavior and Group Formation 1
Chapter 8 Groupbased Lendng and Adverse Selecton: A Study on Rsk Behavor and Group Formaton 1 8.1 Introducton Ths chapter deals wth group formaton and the adverse selecton problem. In several theoretcal
More informationAN ECONOMISTS' VIEW OF SCHOOLING SYSTEMS
AN ECONOMISTS' VIEW OF SCHOOLING SYSTEMS 1 Lous LévyGarboua TEAM, CNRS and Unversty of Pars I PanthéonSorbonne Nathale Damoselet Mnstère de l Educaton and Unversty of Pars VRené Descartes Gérard Lassblle,
More informationThe Racial and Gender Interest Rate Gap. in Small Business Lending: Improved Estimates Using Matching Methods*
The Racal and Gender Interest Rate Gap n Small Busness Lendng: Improved Estmates Usng Matchng Methods* Yue Hu and Long Lu Department of Economcs Unversty of Texas at San Antono Jan Ondrch and John Ynger
More informationTrade Adjustment and Productivity in Large Crises. Online Appendix May 2013. Appendix A: Derivation of Equations for Productivity
Trade Adjustment Productvty n Large Crses Gta Gopnath Department of Economcs Harvard Unversty NBER Brent Neman Booth School of Busness Unversty of Chcago NBER Onlne Appendx May 2013 Appendx A: Dervaton
More informationStudent Performance in Online Quizzes as a Function of Time in Undergraduate Financial Management Courses
Student Performance n Onlne Quzzes as a Functon of Tme n Undergraduate Fnancal Management Courses Olver Schnusenberg The Unversty of North Florda ABSTRACT An nterestng research queston n lght of recent
More informationThe Impact of Residential Density on Vehicle Usage and Energy Consumption *
The Impact of Resdental Densty on Vehcle Usage and Energy Consumpton * September 26, 2008 Forthcomng n the Journal of Urban Economcs Davd Brownstone (correspondng author) Department of Economcs 3151 Socal
More information17 Capital tax competition
17 Captal tax competton 17.1 Introducton Governments would lke to tax a varety of transactons that ncreasngly appear to be moble across jursdctonal boundares. Ths creates one obvous problem: tax base flght.
More informationSupport Vector Machines
Support Vector Machnes Max Wellng Department of Computer Scence Unversty of Toronto 10 Kng s College Road Toronto, M5S 3G5 Canada wellng@cs.toronto.edu Abstract Ths s a note to explan support vector machnes.
More informationThe DAX and the Dollar: The Economic Exchange Rate Exposure of German Corporations
The DAX and the Dollar: The Economc Exchange Rate Exposure of German Corporatons Martn Glaum *, Marko Brunner **, Holger Hmmel *** Ths paper examnes the economc exposure of German corporatons to changes
More informationWORKING PAPER SERIES TAKING STOCK: MONETARY POLICY TRANSMISSION TO EQUITY MARKETS NO. 354 / MAY 2004. by Michael Ehrmann and Marcel Fratzscher
WORKING PAPER SERIES NO. 354 / MAY 2004 TAKING STOCK: MONETARY POLICY TRANSMISSION TO EQUITY MARKETS by Mchael Ehrmann and Marcel Fratzscher WORKING PAPER SERIES NO. 354 / MAY 2004 TAKING STOCK: MONETARY
More informationProblem Set 3. a) We are asked how people will react, if the interest rate i on bonds is negative.
Queston roblem Set 3 a) We are asked how people wll react, f the nterest rate on bonds s negatve. When
More information