Should I stay or should I go? Educational choices and earnings: An empirical study for Portugal |
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Authors: | Leonor Modesto |
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Institution: | (1) FCEE, Universidade Católica Portuguesa, Palma de Cima, 1649-023 Lisboa, Portugal (Fax: +351-217270252; e-mail: lrm@fcee.ucp.pt), PT |
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Abstract: | We analyse educational choices and earnings of individuals at two different levels in the Portuguese educational system.
At each exit we consider two decisions: the decision to continue studying and the employment decision. We find empirical support
for the existence of selectivity bias as the errors of the earnings functions are in general correlated with the disturbances
of the decision functions. The obtained rates of return to education vary between 2.4 and 9.4 percent, depending on whether
or not selectivity and quantity effects are excluded from the computations. Note that selectivity represents three quarters
of this difference.
Received: 5 March 2001/Accepted: 10 October 2001
I am grateful for the comments of the editor and two anonymous referees. Responsible editor: John F. Ermisch. |
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Keywords: | JEL classification: I20 J31 |
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