Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/35129 
Year of Publication: 
2008
Series/Report no.: 
IZA Discussion Papers No. 3310
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
The internal rate of return to schooling is a fundamental economic parameter that is often used to assess whether expenditure on education should be increased or decreased. This paper considers alternative approaches to estimating marginal internal rates of return for different schooling levels. We implement a general nonparametric approach to estimate marginal internal rates of return that take into account tuition costs, income taxes and nonlinearities in the earnings-schooling-experience relationship. The returns obtained by the more general method differ substantially from Mincer returns in levels and in their evolution over time. They indicate relatively larger returns to graduating from high school than from graduating from college, although both have been increasing over time.
Subjects: 
Schooling
marginal internal rate of return
nonparametric estimation
JEL: 
C31
Document Type: 
Working Paper

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