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household characteristics (especially household income). The "true" intergenerational correlation between schooling attainments … and parents' education (after conditioning on observed and unobserved ability) is found to be quite low. Finally, our …
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We estimate a structural dynamic programming model of schooling decisions and obtain individual specific estimates of the local (and average) returns to schooling as well as the returns to experience. Homogeneity of the returns to human capital is strongly rejected in favor of a discrete...
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