Years and Intensity of Schooling Investment.

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    • Abstract:
      The purpose of the present paper has been to argue that years of schooling do not adequately characterize the inputs or the outputs of the process of investing in human capital. In particular, it has been demonstrated that the rate of return on schooling investments cannot be identified from the linear regression of log incomes on years of schooling, even given the knowledge of the average ratio of expenditures to full-time earnings. Empirically, I have shown that this ratio, K, is positively related to years of schooling, and that consequently rates of return which do not account for this correlation are biased upward. Lastly it has been shown that greater intensity of schooling investments may allow high ability students to enter the labor force earlier than their peers of average ability, and that the consequent increase in discounted value of lifetime earnings may be a major route of collecting the returns to high ability. [ABSTRACT FROM AUTHOR]
    • Abstract:
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