Estimating the returns to education from a non-stationary dynamic programming model

Research output: Working paperResearch


  • 0000905

    Final published version, 320 KB, PDF document

  • Christian Belzil, Denmark
  • Jörgen Hansen, Denmark
  • Centre for Labour Market and Social Research
We estimate an optimal stopping model of the decision between continuing schooling or entering the labor market using a cross-section of Swedish labor force participants. The model has finite horizon and is solved in closed-form using backward recursion methods. The model incorporates unobserved ability at school and in the labor market which can be estimated non-parametrically. The construction of the likelihood based on eduction choices and wage data enables us to estimate the wage returns to education as well as the effect of education on non-wage benefits and/or job quality
Original languageEnglish
Publication statusPublished - 1997

    Research areas

  • Lønniveau, Uddannelse, HHÅ forskning, Dynamic programming, Returns to education, Returns to experience, Human capital, Schooling decisions

See relations at Aarhus University Citationformats

Download statistics

No data available

ID: 32300969