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This paper assesses the impact of the returns to education on income of the heads of family in Mexico in 2016. The analysis is based on Mincer’s (1974) earnings function by using microdata from the National Household Income Survey (ENIGH acronym in Spanish) 2016. Estimations following Mincer equation are carried out by levels of schooling. The main conclusion is that as the level of education among Mexican heads of family increases, it magnifies the increase in income levels, which, in turn, enlarges human capital and learning capacity needed for sustained growth and welfare.

This study examines the relevancy of household bargaining processes, childrearing demands, and traditionally gendered breadwinning norms for explaining the implications of married women's earnings relative to those of their spouse for depression. Drawing on 1992–2014 data from the National Longitudinal Survey of Youth, 1979 Cohort, results indicate that shared breadwinning is negatively associated with depression among wives without minor children. Yet despite the salubriousness of employment, shared breadwinning is linked to worse depression for wives with a youngest child aged 0 to 12 or with two or more children 18 and younger. Contrary to expectations from the gender performance perspective, there is minimal evidence that greater relative earnings worsen depression among wives who out-earn their spouse. Results imply that when childrearing demands are high, mothers' contributions to couples' earnings function as an additional demand rather than a resource for their own well-being.

We derive a tractable nonlinear earnings function that we estimate separately individual by individual using NLSY79 data. We obtain three ability measures, a rate of skill depreciation, a time discount rate, and a population-wide estimate of the human capital rental rate. We utilize these parameters to verify a number of heretofore untested theorems based on the life cycle model. We show how these human capital production function parameters relate to cognitive ability, personality traits, and family background. Finally, we show that accounting for individual-specific heterogeneity dramatically reduces estimates of population-wide persistence of permanent and transitory shocks by over 50 percent.

Language competence, particularly in the national standard language ability (NSLA), constitutes a critical dimension of human capital. According to classical human capital theory and endogenous growth models, proficiency in NSLA enhances individuals’ capacity for information acquisition, social communication, and labor market integration, thereby improving employment outcomes and income levels. Drawing on data from the 2021 wave of the Annual Livelihood Survey of Farmers and Herders in Xizang in China, this study investigates the relationship between NSLA and household income among Tibetan farmers and herdsmen. Using an extended Mincerian earnings function, we find that: (1) NSLA has a statistically significant positive effect on household income; (2) among the four dimensions of language competence—listening, speaking, reading, and writing—speaking ability exerts the greatest impact; and (3) the income effect of NSLA varies considerably across income groups, with limited returns for low-income households and diminishing marginal returns for high-income households. These findings suggest that promoting NSLA among the rural Tibetan labor force can enhance income generation capacity and contribute to reducing income inequality. The study offers policy implications for advancing inclusive development and linguistic equity in multilingual, service-oriented economies like Xizang in China.

What makes a successful entrepreneur? Using Danish register data, we find strong support for the hypothesis that theoretical skills from schooling and practical skills acquired through wage-work are complementary inputs in the human capital earnings function of entrepreneurs. In fact, we find that schooling only pays off in combination with wagework experience, as the returns to schooling are insignificant when the entrepreneur has no wage-work experience. The results are extremely robust toward more flexible specifications, including fixed-effect estimations dealing with unobserved heterogeneity. Furthermore, the interaction term is negligible for nonentrepreneurs, suggesting that the complementarity between wage-work experience and schooling is a distinctive characteristic of entrepreneurs.

This paper argues that it suffices to assume distortionary wage taxation to prove the efficiency of effective subsidization of education. The paper does not rely on considerations of equity and market failure to justify subsidies. Instead, the optimal subsidy reduces the social cost of distortive wage taxation. The theoretical approach assumes a Mincer‐type earnings function, analyzes corner solutions of optimal schooling choice and derives the result of efficient subsidization in a Ramsey‐type framework. Second‐best policy is confronted with empirical evidence from OECD countries. The majority of countries are shown to subsidize tertiary education in effective terms.

While providing equal opportunities to all members of society independent of an individual’s socio-economic background is a major objective of German policy makers, educational opportunities of children with a non-academic family background are still unequally obstructed. When analysing the labour market implications of this disadvantage, social capital as an additional source of inequality often lacks attention. Drawing on the instrumental value of rather loose contacts (i.e. weak ties) on the labour market as revealed by Granovetter (Getting a job. A study of contacts and careers, The University of Chicago Press, Cambridge, 1974), this paper goes beyond the human capital approach and includes a measure of instrumental social capital in the form of weak-tie career support in the earnings function. Applying an Oaxaca-Blinder decomposition and quantile regressions, we find a significant average wage gap between those with and without an academic family background. A large part can be explained by deficits that those from less educated families incur with respect to human and instrumental social capital: Lower educational attainment accounts for more than half of the wage gap between the two groups while fewer career support explains around five percent of the differential. Additionally, a non-academic family background is associated with a significant deficit in returns to their instrumental social capital along the wage distribution. The findings therefore suggest that inequalities of opportunity on the German labour market occur beyond the education system, as not only the quantity but also the quality of career supporting networks of those from a non-academic family are inferior.

Using data from 12 European countries and the variation across countries and over time in the changes of minimum school leaving age, we study the effects of the quantity of education on the distribution of earnings. We find that compulsory school reforms significantly affect educational attainment, especially among individuals belonging to the lowest quantiles of the distribution of ability. There is also evidence that additional education reduces conditional wage inequality, and that education and ability are substitutes in the earnings function.

This paper studies how students’ financial literacy affects their perceptions of returns to schooling and consequently their schooling decisions. We first propose a model of human capital accumulation where financially illiterate students exhibit a cognitive bias of “ironing heuristic.” With this decision heuristic, students tend to linearize the relationship between educational investments and future earnings, resulting in underestimated returns to education and inadequate study efforts. Using survey data from four rural middle schools in Southwest China, we then find a positive correlation between financial literacy and students’ perceived returns to education. In particular, the estimate of students’ perceived earnings function shows that its curvature significantly increases with students’ financial knowledge of compound interest, supporting the assumption in the theory. Our findings suggest that promoting students’ financial literacy may be an effective policy to motivate students to learn at school, especially in poor rural areas. JEL: I26, G53 (Financial Literacy), D91, J24

The empirical literature dealing with returns to schooling in Spain is quite scarce. This paper estimates private returns to schooling in Spain over 2008-2019. While average years of schooling increased steadily over the period 2008-2019, returns to schooling followed the same path only until 2014 when they came to a halt. From 2014-2019 a decrease in returns of around 16% took place. Future research framing these results in terms of the labor market adjustments caused by the Great recession and the post-Great recession period will be worthwhile undertaking.