Differences in Returns to Education: An Analysis by Race

摘要: I Introduction INVESTMENT IN HUMAN CAPITAL has been a subject of considerable interest to economists. The returns education have bearing on the quantity investment undertaken in this area. Productivity and social justice are involved. This article identifies three levels educational attainment, high-school, some college, college or higher, estimates percentage gain earnings at each level (relative fourth group consisting those who did not complete high school) for black white workers separately. Unlike previous research, study also tracks trend these over twenty year period, 1967-86. racial gap highlights differential incentive members race invest schooling, from policy point view sheds light where governmental efforts should be most concentrated. II Previous Studies STUDIES computing rate return general plentiful. A number studies estimated different countries. In one more comprehensive studies, Psacharopoulos (1985) calculated 61 Grouping countries by their economic development, he confirmed earlier well-documented declining pattern education. found that profitable opportunity was primary education, secondary second. He attributed low cost productivity between school graduates illiterate. any were highest least-developed countries, lowest advanced West. For United States, reported 11% graduates, 5.3% with higher 1976. More recently, Pencavel (1991) showed earned 65% than diplomas. However, sensitive age, high-school ranging 46% younger workers, 69% aged 45 54. Although examined differentials gender, compute them race. Lydon (1989) premiums arising completion His data included 1940, 1950, 1960, 1970 1980 censuses as well 1988 Current Population Survey. limited his focus whites, led 30% 1950 64% education). But recent work neglected effects across lines. Little done since Freeman's (1976) excellent work. III Data Methodology ALL RESULTS COMPUTED based Panel Study Income Dynamics, Waves (I-XX) covering period 1967 1986. drawn households had least member non-institutionalized population 48 contiguous states District Columbia. subsample PSID low-income non-elderly sampled Census Bureau. These households, unequal probabilities selection depended geographic location, race, income, added sample insure there would sufficient income and, especially, permit separate analyses populations. is combination representative cross-section nearly 3,000 families selected Survey Research Center's master sampling frame, about 1,900 previously interviewed Bureau Office Economic Opportunity. combined appropriately weighted all people States. …