On Estimating the Economic Value of Schooling and Experience

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Abstract
This paper attempts to demonstrate two things. First, sociologists interested in the processes governing income attainment and inequality should consider incorporating into socioeconomic achievement models indicators of work experience that correspond to the following life-cycle events: schooling, initialfull- time entry into the labor market, and assumption of current job. The findings presented here suggest that two types of postschooling market experience substantially enhance earnings. Experience acquired during the formal schooling process, however, is of little economic value, a hypothesis underlying both a segment of Mincer's formulation of human capital theory and the conventional techniques employed to estimate postschooling work experience from other variables (e.g., age and schooling). Second, extreme caution must be taken in the conceptualization and measurement of work experience and its specification in earnings models. Conceptual and measurement strategies deemed theoretically incorrect yield estimates of the earnings returns to experience and schooling which are seriously biased.

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