Interpreting degree effects in the returns to education

Research output: Contribution to journalArticlepeer-review

19 Scopus citations


Researchers often identify degree effects by including degree attainment (D) and years of schooling (S) in a wage model, yet the source of independent variation in these measures is not well understood. We argue that S is negatively correlated with ability among degree-holders because the most able graduate the fastest, but positively correlated among dropouts because the most able benefit from increased schooling. Using NLSY79 data, we find support for this argument; our findings also suggest that highest grade completed is the preferred measure of S for dropouts, while age at school exit is a more informative measure for degree-holders.

Original languageEnglish (US)
Pages (from-to)439-467
Number of pages29
JournalJournal of Human Resources
Issue number2
StatePublished - Mar 2010
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics
  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation


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