High School Graduation, Performance and Earnings / Andrew Weiss.

By:

Weiss, Andrew

Contributor(s):

National Bureau of Economic Research

Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w1595.Publication details: Cambridge, Mass. National Bureau of Economic Research 1985.Description: 1 online resource: illustrations (black and white)Online resources:

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Abstract: Using data from the Panel Study of Income Dynamics and a proprietary sample of semi-skilled production workers, this paper investigates the reasons for the discontinuous increase in wages associated with graduation from high school. Associated with graduation from high school, we find a discontinuous decrease in a worker's propensities to quit or be absent. However, we do not find that high school graduates have a comparative advantage on production jobs requiring more training, nor, in the PSID sample, are high school graduates assigned to jobs requiring more training. Finally, we find that the wage premium associated with graduation from high school vanishes during severe slumps, periods in which employers are likely to be hoarding labor and in which quits and absences are least important to firms. We conclude from this evidence that the sorting model of education provides a better explanation for the higher wages of high school graduates than does the human capital model.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w1595 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w15947 Local Labor Markets /	nber w15948 Characteristic Timing /	nber w15949 The Economics of International Differences in Educational Achievement /	nber w1595 High School Graduation, Performance and Earnings /	nber w15950 Does Risk Explain Anomalies? Evidence from Expected Return Estimates /	nber w15951 Measurement Errors in Investment Equations /	nber w15952 Borrow Cheap, Buy High? The Determinants of Leverage and Pricing in Buyouts /	Next

April 1985.

Using data from the Panel Study of Income Dynamics and a proprietary sample of semi-skilled production workers, this paper investigates the reasons for the discontinuous increase in wages associated with graduation from high school. Associated with graduation from high school, we find a discontinuous decrease in a worker's propensities to quit or be absent. However, we do not find that high school graduates have a comparative advantage on production jobs requiring more training, nor, in the PSID sample, are high school graduates assigned to jobs requiring more training. Finally, we find that the wage premium associated with graduation from high school vanishes during severe slumps, periods in which employers are likely to be hoarding labor and in which quits and absences are least important to firms. We conclude from this evidence that the sorting model of education provides a better explanation for the higher wages of high school graduates than does the human capital model.