PT  - JOURNAL ARTICLE
AU  - Alfonso Flores-Lagunes
AU  - Audrey Light
TI  - Interpreting Degree Effects in the Returns to Education
AID  - 10.3368/jhr.45.2.439
DP  - 2010 Mar 01
TA  - Journal of Human Resources
PG  - 439--467
VI  - 45
IP  - 2
4099  - http://jhr.uwpress.org/content/45/2/439.short
4100  - http://jhr.uwpress.org/content/45/2/439.full
SO  - J Hum Resour2010 Mar 01; 45
AB  - Researchers often identify degree effects by including degree attainment (D) and years of schooling (S) in a wage model, yet the source of independent variation in these measures is not well understood. We argue that S is negatively correlated with ability among degree-holders because the most able graduate the fastest, but positively correlated among dropouts because the most able benefit from increased schooling. Using NLSY79 data, we find support for this argument; our findings also suggest that highest grade completed is the preferred measure of S for dropouts, while age at school exit is a more informative measure for degree-holders.