Students' choices in education can only be based on expected outcomes. Econometric models that infer expectations based on ex post outcomes impose a rational structure of expectations on school performance and post-graduation earnings. Direct surveys suggest much ignorance and fuzziness. We use...

We develop a simple human capital model for optimum schooling length when earnings are stochastic, and highlight the pivotal role of risk attitudes and the schooling gradient of earnings risk. We use Spanish data to document the gradient and to estimate individual response to earnings risk in...

In this paper we make a systematic presentation of returns to education in Austria for the period 1981-1997. We use consistent cross-sections from the Mikrozensus and find falling returns over time. These falling returns are not caused by changes in the sample design and reduced willingness to...

Individual time preference determines schooling enrolment. Moreover, smoking behavior in early ages has been shown to be highly related to time preference rates. Accordingly, we use smoking at age 16 as an instrument for schooling in order to cope with ability bias in a returns to education...

In this paper we make a systematic presentation of returns to education in Austria for the period 1981-1997. We use consistent cross-sections from the Mikrozensus and find falling returns over time. These falling returns are not caused by changes in the sample design and reduced willingness to...

Individual time preference determines schooling enrolment. Moreover, smoking behavior in early ages has been shown to be highly related to time preference rates. Accordingly, we use smoking at age 16 as an instrument for schooling in order to cope with ability bias in a returns to education...

Many recent studies that were based on "exogenous" sources of variation in education outcomes' IV estimates of returns to schooling were substantially higher than the corresponding OLS estimates. Card (1995a) suggests that these results are explained by the existence of heterogeneity in...

Individual time preference determines schooling enrollment. Moreover, smoking behavior in early ages has been shown to be highly related to time preference rates. Accordingly, we use smoking at age 16 as an instrument for schooling in order to cope with ability bias in a returns to education...

Comparing cohorts born between 1951 and 1994, we document and interpret changes in the wage differential among graduates from secondary education with a vocational and a general curriculum. The wage gap initially increased and then decreased. We find that these changes cannot be attributed to...