We exploit variation in wage growth induced by increases in world oil prices to estimate the elasticity of young men’s labor market participation and school enrollment with respect to after-tax wages. Our main finding is that in the aggregate, increased wages have a dual impact: They tend...

The probability of dropping out of high school varies considerably with parental education. Using a rich Canadian panel data set, we examine the channels determining this socioeconomic status effect. We estimate an extended version of Carneiro, Hansen and Heckman (2003)’s factor model,...

We examine the impact of literacy on immigrant earnings and the sources of lower returns to education and experience among immigrants. We find that the native-born literacy distribution dominates that for immigrants. However, the two groups obtain similar returns to literacy skills, contrary to...

Recent surveys on the labor-supply responses of men document a divergence in the estimates of substitution and income effects obtained using various estimation approaches. Generally, studies accounting for nonlinear tax schedules in a static setting via a piecewise-linear approach produce...