Estimating the Returns to Schooling : Implications from a Dynamic Discrete Choice Model

  title={Estimating the Returns to Schooling : Implications from a Dynamic Discrete Choice Model},
  author={Suqin Ge},
This paper assesses the applicability of a dynamic discrete choice model in accounting for the observed ordinary least squares (OLS) and instrumental variable (IV ) estimates of the Mincer equation parameter on returns to schooling. A dynamic model of schooling and employment choices is estimated and used to simulate educational attainment, employment history, and wages. Estimations of the Mincer wage equation using simulated data appear to validate the model. Ability selection is found to be… CONTINUE READING
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