Educational Attainment and the Returns to Education for Australian Youth

Evidence of Self-Selection?

Published in: Economic Analysis and Policy, v. 21, no. 1, Mar. 1998, p. 29-45

Posted on RAND.org on January 01, 1991

by Noel Gaston, Roland Sturm

Read More

Access further information on this document at www.ecosoc.org.au

This article was published outside of RAND. The full text of the article can be found at the link above.

Debates concerning the re-introduction of tertiary fees in Australia have made rates of return on education an active topic for investigation. This paper provides estimates of the returns to education that allow for worker heterogeneity and individual self-selection in the education process. Using data drawn from the Australian Longitudinal Survey, a sequential estimation procedure is used that enables us to study the interaction between educational attainment and earnings determination. We find that traditional OLS measures of rates of return to education are understated and hence, counsel caution in the interpretation and use of the estimated returns provided by some authors.

This report is part of the RAND Corporation External publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.

Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit www.rand.org/about/research-integrity.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.