Using a structural dynamic programming model, we investigate the relative importance of family background variables and individual specific abilities in explaining cross-sectional differences in schooling attainments and wages. Given scholastic ability, household background variables (especially...

Previous studies on gender wage discrimination have relied on OLS when estimating the wage equations. However, there exists a number of recent studies, devoted to estimating the return to education, that have shown that OLS may produce biased estimates for a number of reasons. Consequently, if...