Do Human Arts Really Offer a Lower Return to Education?

Carl-Johan Dalgaard, Esben Anton Schultz, Anders Sørensen

Research output: Working paperResearch

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Abstract

Is the wage gap between majors in human arts and other fields caused by their education per se? If the educational choice is endogenous, the gap may instead be caused by selection. We document that individuals’ educational choice is correlated with that of older students, and argue that it should not influence wages directly.
Exploiting this "cohort dependence" as an instrument for educational choice, our 2SLS estimates show that the hourly wage gap is attributable to selection. However, only half of the gap in annual earnings is explained by selection, whereas the other half is due to lower work hours.
Original languageEnglish
Place of PublicationFrederiksberg
PublisherCentre for Economic and Business Research, Copenhagen Business School
Number of pages43
Publication statusPublished - 2012
SeriesCEBR Discussion Paper

Keywords

  • Returns to education
  • Human Arts
  • Instrumental Variables

Cite this

Dalgaard, C-J., Schultz, E. A., & Sørensen, A. (2012). Do Human Arts Really Offer a Lower Return to Education? Centre for Economic and Business Research, Copenhagen Business School. CEBR Discussion Paper