Wage differentials between skill groups are larger in the US than in most western European countries. Especially low skilled workers are relatively worse off in the US than elsewhere. A simple demand and supply explanation for this fact would be that relative net supply of low skilled workers in...

In this paper we focus on education as a private decision to invest in ‘human capital’ and the estimation of the rate of return to that private investment. While the literature is replete with studies that estimate the rate of return using regression methods where the estimated return is...