Returns to Graduate and Professional Education: The Roles of Mathematical and Verbal Skills by Major

Students in majors with higher average quantitative GRE scores are less likely to attend graduate school while students in majors with higher average verbal GRE scores are more likely to attend graduate school.  This sorting effect means that students whose cognitive skills are associated with lower earnings at the bachelor’s level are the most likely to attend graduate school.  As a result, there is a substantial downward bias in estimated returns to graduate education.  Correcting for the sorting effect raises estimated annualized returns to a Master’s or doctoral degree from about 5% to 14.5% and 12.6% respectively.  Estimated returns to professional degrees rise from 14% to 20%.  These findings correspond to a large increase in relative earnings received by post graduate degree holders in the United States over the past 20 years.sorting; Phd degree; Master's degree; Professional degree; GRE; Returns; Graduate Education; verbal ability; mathematics ability

Four essays on technology adoption and returns to skill in the US

We investigate two plausible factors that may have affected changes in wage inequality: returns to higher education and returns to new technologies. The first two chapters examine the role of mathematics and verbal ability in estimating returns to advanced degrees. When average abilities within the major are treated as missing variables, we found that OLS estimates of returns to graduate education are underestimated. When average ability in the major is treated as part of an endogenous decision regarding whether to attend post-graduate degree programs, we find that students in majors with higher average mathematics skills are less likely to progress beyond the bachelor\u27s degree while the opposite happens with average verbal skills.;The next two chapters examine the decision of whether to adopt Internet and computer technologies and the returns to adoption. We first identify demand-side and supply-side factors that affect technology adoption in urban and rural areas. Local access to high speed Internet plays an important role in the technology adoption decision. It increases the probability of using computers and the Internet for work from home and also increases the likelihood of using the Internet at work. That factor alone explains about half of the gap in Internet adoption at home or at work between urban and rural workers. Together, the demand and supply-side factors identified in the analysis completely explain the differences in technology adoption between urban and rural areas.;Using the previous model to identify the endogenous probability of adopting various information technologies, we estimate returns to adoption in the context of an earnings function. When treated as exogenous, adoption has an implausibly large positive and significant effect on earnings. When the endogeneity of the choice to adopt is controlled, the estimated returns to adoption shrink in both sign and significance. Thus, while adoption is strongly tied to the availability of high-speed Internet in the home county, the higher income of adopters is due to factors that raise both the probability of adoption and earnings and not to the adoption per se

The Role of Mathematical and Verbal Skills on the Returns to Graduate and Professional Education

Students in majors with higher average quantitative GRE scores are less likely to attend graduate school while students in majors with higher average verbal GRE scores are more likely to attend graduate school. This sorting effect means that students whose cognitive skills are associated with lower earnings at the bachelorï¾’s level are the most likely to attend graduate school. As a result, there is a substantial downward bias in estimated returns to graduate education. Correcting for the sorting effect raises estimated annualized returns to a Masterï¾’s or doctoral degree from about 5% to 7.3% and 12.8% respectively. Estimated returns to professional degrees rise from 13.9% to 16.6%. These findings correspond to a large increase in relative earnings received by postgraduate degree holders in the United States over the past 20 years.sorting; Postgraduate; Rate of return; Demand for schooling; Quantitative skills; Qualitative skills

Returns to Graduate and Professional Education: The Roles of Mathematical and Verbal Skills by Major

Students in majors with higher average quantitative GRE scores are less likely to attend graduate school while students in majors with higher average verbal GRE scores are more likely to attend graduate school. This sorting effect means that students whose cognitive skills are associated with lower earnings at the bachelor’s level are the most likely to attend graduate school. As a result, there is a substantial downward bias in estimated returns to graduate education. Correcting for the sorting effect raises estimated annualized returns to a Master’s or doctoral degree from about 5% to 7.3% and 12.8% respectively. Estimated returns to professional degrees rise from 13.9% to 16.6%. These findings correspond to a large increase in relative earnings received by postgraduate degree holders in the United States over the past 20 years

The role of mathematical and verbal skills on the returns to graduate and professional education

Students in majors with higher average quantitative graduate records exam (GRE) scores are less likely to attend graduate school whereas students in majors with higher average verbal GRE scores are more likely to attend graduate school. This sorting effect means that students whose cognitive skills are associated with lower earnings at the bachelor\u27s level are the most likely to attend graduate school. As a result, there is a substantial downward bias in estimated returns to graduate education. Correcting for the sorting effect raises estimated annualized returns to a Master\u27s or doctoral degree from about 5% to 7.3% and 12.8%, respectively. Estimated returns to professional degrees rise from 13.9% to 16.6%. These findings correspond to a large increase in relative earnings received by postgraduate degree holders in the United States over the past 20 years

Four essays on technology adoption and returns to skill in the US

We investigate two plausible factors that may have affected changes in wage inequality: returns to higher education and returns to new technologies. The first two chapters examine the role of mathematics and verbal ability in estimating returns to advanced degrees. When average abilities within the major are treated as missing variables, we found that OLS estimates of returns to graduate education are underestimated. When average ability in the major is treated as part of an endogenous decision regarding whether to attend post-graduate degree programs, we find that students in majors with higher average mathematics skills are less likely to progress beyond the bachelor's degree while the opposite happens with average verbal skills.;The next two chapters examine the decision of whether to adopt Internet and computer technologies and the returns to adoption. We first identify demand-side and supply-side factors that affect technology adoption in urban and rural areas. Local access to high speed Internet plays an important role in the technology adoption decision. It increases the probability of using computers and the Internet for work from home and also increases the likelihood of using the Internet at work. That factor alone explains about half of the gap in Internet adoption at home or at work between urban and rural workers. Together, the demand and supply-side factors identified in the analysis completely explain the differences in technology adoption between urban and rural areas.;Using the previous model to identify the endogenous probability of adopting various information technologies, we estimate returns to adoption in the context of an earnings function. When treated as exogenous, adoption has an implausibly large positive and significant effect on earnings. When the endogeneity of the choice to adopt is controlled, the estimated returns to adoption shrink in both sign and significance. Thus, while adoption is strongly tied to the availability of high-speed Internet in the home county, the higher income of adopters is due to factors that raise both the probability of adoption and earnings and not to the adoption per se.</p

The role of mathematical and verbal skills on the returns to graduate and professional education

Students in majors with higher average quantitative graduate records exam (GRE) scores are less likely to attend graduate school whereas students in majors with higher average verbal GRE scores are more likely to attend graduate school. This sorting effect means that students whose cognitive skills are associated with lower earnings at the bachelor's level are the most likely to attend graduate school. As a result, there is a substantial downward bias in estimated returns to graduate education. Correcting for the sorting effect raises estimated annualized returns to a Master's or doctoral degree from about 5% to 7.3% and 12.8%, respectively. Estimated returns to professional degrees rise from 13.9% to 16.6%. These findings correspond to a large increase in relative earnings received by postgraduate degree holders in the United States over the past 20 years.This is a working paper of an article from Economics of Education Review 27 (2008): 664, doi: 10.1016/j.econedurev.2007.09.008.</p

Returns to Graduate and Professional Education: The Roles of Mathematical and Verbal Skills by Major

Students in majors with higher average quantitative GRE scores are less likely to attend graduate school while students in majors with higher average verbal GRE scores are more likely to attend graduate school. This sorting effect means that students whose cognitive skills are associated with lower earnings at the bachelor’s level are the most likely to attend graduate school. As a result, there is a substantial downward bias in estimated returns to graduate education. Correcting for the sorting effect raises estimated annualized returns to a Master’s or doctoral degree from about 5% to 7.3% and 12.8% respectively. Estimated returns to professional degrees rise from 13.9% to 16.6%. These findings correspond to a large increase in relative earnings received by postgraduate degree holders in the United States over the past 20 years.</p

Returns to Graduate and Professional Education: The Roles of Mathematical and Verbal Skills by Major

Students in majors with higher average quantitative GRE scores are less likely to attend graduate school while students in majors with higher average verbal GRE scores are more likely to attend graduate school. This sorting effect means that students whose cognitive skills are associated with lower earnings at the bachelor's level are the most likely to attend graduate school. As a result, there is a substantial downward bias in estimated returns to graduate education. Correcting for the sorting effect raises estimated annualized returns to a Master's or doctoral degree from about 5% to 14.5% and 12.6% respectively. Estimated returns to professional degrees rise from 14% to 20%. These findings correspond to a large increase in relative earnings received by post graduate degree holders in the United States over the past 20 years

Broadband Access, Telecommuting and the Urban-Rural Digital Divide

We investigate the role of broadband access on the probability of telecommuting and whether individuals who work from home receive greater compensation. We also assess whether telecommuting differs between more- and less-densely populated areas. Telecommuting responds positively to local average commuting time and to local access to High-Speed Internet service. Differences in broadband access explain three-fourths of the gap in telecommuting between urban and rural markets. Telecommuters and other IT users do not earn significantly more than otherwise observationally comparable workers. Already highly skilled and highly paid workers are the most likely to telecommute and so they do not earn more because they telecommute. As broadband access improves in rural markets, the urban-rural gap in telecommuting will diminish. The urban-rural pay gap will also decrease if improved broadband access induces some already highly paid urban workers to move to rural areas