Separating Uncertainty from Heterogeneity in Life Cycle Earnings

This paper develops and applies a method for decomposing cross section variability of earnings into components that are forecastable at the time students decide to go to college (heterogeneity) and components that are unforecastable. About 60% of variability in returns to schooling is forecastable. This has important implications for using measured variability to price risk and predict college attendance.

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Year of publication:	2004-12
Authors:	Cunha, Flavio ; Heckman, James ; Navarro, Salvador
Institutions:	Institute for the Study of Labor (IZA)
Subject:	uncertainty \| lifecycle earnings \| schooling \| heterogeneity \| counterfactuals

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Extent:	application/pdf
Series:	IZA Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 1437 125 pages
Classification:	C33 - Models with Panel Data ; D84 - Expectations; Speculations ; I21 - Analysis of Education
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005822068