Leibowitz, Arleen. <br/><br/>
Years and Intensity of Schooling Investing / 
Arleen Leibowitz. 
 - Cambridge, Mass.  National Bureau of Economic Research  1974. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w0049 .
 - Working Paper Series (National Bureau of Economic Research)  no. w0049. .
<br/><br/> August 1974. 
<br/><br/> An essential feature of schooling is not only that it occurs in a different site than most on-the-job training but also that it is more intensive. That is, a smaller proportion of gross potential earnings is sacrificed in on-the-job training than in schooling.  In estimating human capital earnings functions it has generally been assumed that during schooling 100% of gross potential earnings are invested in all years, while in on-the-job training this percentage is smaller and is a declining function of age. This assumption has been quite useful since it allows the identification of an estimate of the rate of return on schooling from a regression of earnings on years of schooling. This paper argues that the percentage of gross earnings invested may fall below 100% well before schooling is ended, that this percentage is likely to be correlated with years of schooling, and thus this procedure yields only a biased estimate of the rate of return to schooling. 
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