Jared Ashworth, V Joseph Hotz, Arnaud Maurel, Tyler Ransom, 14 April 2018

An important determinant of wages is how much human capital one possesses. This column considers the effect of schooling and early career work experience on later life wages, and whether these effects have changed across recent cohorts of men in the US. It finds that the returns to an additional year of schooling are significantly overstated when early career work experience is not accounted for, as are the returns to a high school diploma or bachelor’s degree. In addition, the returns to an additional year of working while in high school or college are larger than to the returns to an additional year of schooling.

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