Michigan State University Extension
Diversity and Pluralism - DP130044
12/95/
ERIC TITLE NUMBER: ED333820 AUTHOR: Altonji, Joseph G.
TITLE: Accounting for Uncertain Educational Outcomes in
Estimating the Return to Education. Technical Paper No. 15.
YEAR PUBLISHED: 1990
NOTE: 16 p.
AVAILABILITY: National Center on Education and Employment,
Box 174, Teachers College, Columbia University, New York,
NY 10027.
ABSTRACT: A prototype model was developed to estimate the
effect of various variables on the internal rate of return
to starting college. The model arose out of observations
that there is a nonlinear relationship between education
and earnings, that many students who begin college never
finish, that there are large differences across fields of
specialization in the earnings differential between college
and high school graduates, and that many high school and
family background characteristics appear to affect
earnings. The model was then applied to data from the
National Longitudinal Survey of the High School Class of
1972. Results found that black males have a lower rate of
return on one year of college than white males (5.4 percent
versus 5.9 percent) which appears, however, to be due not
to race but to other characteristics. Females also had a
lower rate of return than men. It was noted that none of
these differences are explained by differences in the
observed characteristics of males and females. Other
research using this model has shown a higher return on
college attendance for women over men. It is suggested that
further research and refinement of the model is necessary
before strong conclusions can be developed. The study
includes one table displaying results and nine references.
(JB)
KEY DESCRIPTORS: Blacks-; College-Role; Family
Characteristics; Higher-Education; High-School-Graduates;
High-Schools; Racial-Factors; Salaries-; Sex-Differences;
Socioeconomic-Status; Wages-
KEY DESCRIPTORS: *College-Outcomes-Assessment; *Educational
Economics; *Income-; *Models-
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