A human capital model of the effects of ability and family background on optimal schooling levels

Tracy L. Regan; Ronald L. Oaxaca; Galen Burghardt

doi:10.1111/j.1465-7295.2007.00058.x

A human capital model of the effects of ability and family background on optimal schooling levels

Tracy L. Regan, Ronald L. Oaxaca, Galen Burghardt

Economics

Research output: Contribution to journal › Article › peer-review

4 Scopus citations

Abstract

This paper develops a theoretical model of optimal schooling levels where ability and family background are the central explanatory variables. We derive schooling demand and supply functions based on individual wealth maximization. Using the National Longitudinal Survey of Youth 1979 data, we stratify our sample into 1-yr full-time equivalent (FTE) work experience cohorts for 1985-1989. The estimated Mincerian "overtaking" cohort (the years of work experience at which individuals' observed earnings approximately equal what they would have been based on schooling and ability alone) corresponds to 13 FTE years of experience, yielding on average a rate of return of 10.3% and an average (optimal) 11.4 yr of schooling. (JEL J24, J31, J22)

Original language	English (US)
Pages (from-to)	721-738
Number of pages	18
Journal	Economic Inquiry
Volume	45
Issue number	4
DOIs	https://doi.org/10.1111/j.1465-7295.2007.00058.x
State	Published - Oct 2007

ASJC Scopus subject areas

General Business, Management and Accounting
Economics and Econometrics

Access to Document

10.1111/j.1465-7295.2007.00058.x

Cite this

@article{d5a8c2870d934c57b41f9a640b5f11ca,

title = "A human capital model of the effects of ability and family background on optimal schooling levels",

abstract = "This paper develops a theoretical model of optimal schooling levels where ability and family background are the central explanatory variables. We derive schooling demand and supply functions based on individual wealth maximization. Using the National Longitudinal Survey of Youth 1979 data, we stratify our sample into 1-yr full-time equivalent (FTE) work experience cohorts for 1985-1989. The estimated Mincerian {"}overtaking{"} cohort (the years of work experience at which individuals' observed earnings approximately equal what they would have been based on schooling and ability alone) corresponds to 13 FTE years of experience, yielding on average a rate of return of 10.3% and an average (optimal) 11.4 yr of schooling. (JEL J24, J31, J22)",

author = "Regan, {Tracy L.} and Oaxaca, {Ronald L.} and Galen Burghardt",

year = "2007",

month = oct,

doi = "10.1111/j.1465-7295.2007.00058.x",

language = "English (US)",

volume = "45",

pages = "721--738",

journal = "Economic Inquiry",

issn = "0095-2583",

publisher = "Wiley-Blackwell Publishing Ltd",

number = "4",

}

TY - JOUR

T1 - A human capital model of the effects of ability and family background on optimal schooling levels

AU - Regan, Tracy L.

AU - Oaxaca, Ronald L.

AU - Burghardt, Galen

PY - 2007/10

Y1 - 2007/10

N2 - This paper develops a theoretical model of optimal schooling levels where ability and family background are the central explanatory variables. We derive schooling demand and supply functions based on individual wealth maximization. Using the National Longitudinal Survey of Youth 1979 data, we stratify our sample into 1-yr full-time equivalent (FTE) work experience cohorts for 1985-1989. The estimated Mincerian "overtaking" cohort (the years of work experience at which individuals' observed earnings approximately equal what they would have been based on schooling and ability alone) corresponds to 13 FTE years of experience, yielding on average a rate of return of 10.3% and an average (optimal) 11.4 yr of schooling. (JEL J24, J31, J22)

AB - This paper develops a theoretical model of optimal schooling levels where ability and family background are the central explanatory variables. We derive schooling demand and supply functions based on individual wealth maximization. Using the National Longitudinal Survey of Youth 1979 data, we stratify our sample into 1-yr full-time equivalent (FTE) work experience cohorts for 1985-1989. The estimated Mincerian "overtaking" cohort (the years of work experience at which individuals' observed earnings approximately equal what they would have been based on schooling and ability alone) corresponds to 13 FTE years of experience, yielding on average a rate of return of 10.3% and an average (optimal) 11.4 yr of schooling. (JEL J24, J31, J22)

UR - http://www.scopus.com/inward/record.url?scp=35348929954&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=35348929954&partnerID=8YFLogxK

U2 - 10.1111/j.1465-7295.2007.00058.x

DO - 10.1111/j.1465-7295.2007.00058.x

M3 - Article

AN - SCOPUS:35348929954

SN - 0095-2583

VL - 45

SP - 721

EP - 738

JO - Economic Inquiry

JF - Economic Inquiry

IS - 4

ER -

A human capital model of the effects of ability and family background on optimal schooling levels

Abstract

ASJC Scopus subject areas

Access to Document

Other files and links

Fingerprint

Cite this