We apply a recently proposed method to disentangle unobserved heterogeneity from risk in returns to education to data for the USA, the UK and Germany. We find that in residual wage variation, uncertainty by far dominates unobserved heterogeneity. The relation between uncertainty and level of...

The paper provides a theoretical foundation for the empirical regularities observed in estimations of wage consequences of overeducation and undereducation. Workers with more education than required for their jobs are observed to suffer wage penalties relative to workers with the same education...

In a corporatist country like the Netherlands, wages should not be distinguished by union membership status, but by bargaining regime. Acknowledging only the firms’ bargaining regime, we find small differences between four regimes and certainly no distinction between ‘covered’ and...