We examine evidence on omitted-ability bias in estimates of the economic return to schooling, using proxies for unobserved ability. We consider measurement error in these ability proxies and the potential endogeneity of both experience and schooling, and examine wages at labor market entry and...

One competitive-market explanation of interindustry wage differentials that is not challenged by the persistence of these differentials is that they are due to differences across workers in unobserved ability or quality. In contrast, this paper explores the unobserved ability hypothesis by using...

Over the 1980s there were sharp increases in the return to schooling estimated with conventional wage regressions. We use both a signaling model and a human capital model to explore how the relationship between ability and schooling could have changed over this period in ways Chat would have...