We analyse how progressive taxation and education subsidies affect schooling deci-
sions when the returns to education are stochastic. We use the theory of real options to solve the problem of education choice in a dynamic, ...
We extend the standard human capital earnings function to include dispersion in the return to schooling by treating the return as a random coefficient. If the rapid expansion in participation in higher education has been ...
We apply a new estimator to the measurement of the economic returns to education. We control for endogenous education, unobserved ability and measurement error using only the natural heteroscedasticty of wages and education ...