Earnings Functions and Rates of Return

The internal rate of return to schooling is a fundamental economic parameter that is often used to assess whether expenditure on education should be increased or decreased. This paper considers alternative approaches to estimating marginal internal rates of return for different schooling levels. We implement a general nonparametric approach to estimate marginal internal rates of return that take into account tuition costs, income taxes and nonlinearities in the earnings-schooling-experience relationship. The returns obtained by the more general method differ substantially from Mincer returns in levels and in their evolution over time. They indicate relatively larger returns to graduating from high school than from graduating from college, although both have been increasing over time.schooling, marginal internal rate of return, nonparametric estimation

Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond

This paper considers the interpretation of "Mincer rates of return." We test and reject the Mincer model. It fails to track the time series of true returns. We show how repeated cross section and panel data improves the ability of analysts to estimate the ex ante and ex post marginal rate of returns. Accounting for sequential revelation of information calls into question the validity of the internal rate of return as a tool for policy analysis. The large estimated psychic costs of schooling found in recent work helps to explain why persons do not attend school even though the financial rewards for doing so are high. We present methods for computing distributions of ex post and ex ante returns.

EARNINGS FUNCTIONS AND RATES OF RETURN

The internal rate of return to schooling is a fundamental economic parameter that is often used to assess whether expenditure on education should be increased or decreased. This paper considers alternative approaches to estimating marginal internal rates of return for different schooling levels. We implement a general nonparametric approach to estimate marginal internal rates of return that take into account tuition costs, income taxes and nonlinearities in the earnings-schooling-experience relationship. The returns obtained by the more general method differ substantially from Mincer returns in levels and in their evolution over time. They indicate relatively larger returns to graduating from high school than from graduating from college, although both have been increasing over time.

Fifty Years of Mincer Earnings Regressions

The Mincer earnings function is the cornerstone of a large literature in empirical economics. This paper discusses the theoretical foundations of the Mincer model and examines the empirical support for it using data from Decennial Censuses and Current Population Surveys. While data from 1940 and 1950 Censuses provide some support for Mincer's model, data from later decades are inconsistent with it. We examine the importance of relaxing functional form assumptions in estimating internal rates of return to schooling and of accounting for taxes, tuition, nonlinearity in schooling, and nonseparability between schooling and work experience. Inferences about trends in rates of return to high school and college obtained from our more general model differ substantially from inferences drawn from estimates based on a Mincer earnings regression. Important differences also arise between cohort-based and cross-sectional estimates of the rate of return to schooling. In the recent period of rapid technological progress, widely used cross-sectional applications of the Mincer model produce dramatically biased estimates of cohort returns to schooling. We also examine the implications of accounting for uncertainty and agent expectation formation. Even when the static framework of Mincer is maintained, accounting for uncertainty substantially affects the return estimates. Considering the sequential resolution of uncertainty over time in a dynamic setting gives rise to option values, which fundamentally changes the analysis of schooling decisions. In the presence of sequential resolution of uncertainty and option values, the internal rate of return - a cornerstone of classical human capital theory - is not a useful guide to policy analysis.

Which interventions are best for alleviating nipple pain in nursing mothers?

The best intervention is education on proper positioning and attachment of the infant (strength of recommendation [SOR]: A, a systematic review of randomized controlled trials [RCTs]). No single topical preparation has been consistently demonstrated to be superior to others for relieving nipple pain (SOR: B, inconsistent RCTs). Topical agents that show some evidence of benefit include expressed breast milk, lanolin, warm water compresses, tea bag compresses, hydrogel dressings, a chlorhexidinealcohol spray, and a polyethylene film dressing (SOR: B, inconsistent RCTs). Several studies found these interventions to be equivalent to basic breast care, including keeping the nipple clean and dry (SOR: B, RCTs)

What is the best surveillance for hepatocellular carcinoma in chronic carriers of hepatitis B?

Screening patients with chronic hepatitis B infection (HBsAg+) for hepatocellular carcinoma by alpha-fetoprotein (AFP) or by AFP plus ultrasound (AFP/US) detects hepatocellular carcinoma tumors at earlier stages and increases resection rates (strength of recommendation [SOR]: B, based on a systematic review of fair-quality randomized controlled trials). It is unclear whether screening with AFP or AFP/US improves disease-specific or all-cause mortality (SOR: B)

How effective are lifestyle changes for controlling hypertension?

Regular aerobic exercise, weight loss of 3% to 9% of body weight, reduced dietary salt, the DASH diet, and moderation of alcohol intake are all lifestyle interventions that lower blood pressure. Average blood pressure decreases range from 3 to 11 mm Hg systolic and 2.5 to 5.5 mm Hg diastolic, depending on the particular intervention (strength of recommendation [SOR]: A, based on systematic reviews of randomized controlled trials [RCTs]). Studies of community-based interventions advocating combinations of the above have had mixed results with less reduction in blood pressure noted than for the individual interventions described above (SOR: B, RCTs with inconsistent results)