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The Economic Journal

Marginal College Wage Premiums Under Selection Into Employment

We identify female long-term wage returns to college education using the educational expansion between 1960–90 in West Germany as exogenous variation for college enrolment. We estimate marginal treatment effects and propose a simple partial identification technique accounting for women selecting into employment due to having a college education. College-educated women are, on average, more than 18 percentage points more likely to be employed due to having a college education than those without college education. Taking this into account, we bound wage returns to 5.7%–13.9% per year of education completed (average treatment effects on the treated).

Westphal, M., D. Kamhöfer and H. Schmitz (2022), Marginal College Wage Premiums Under Selection Into Employment. The Economic Journal, 132, 646, 2231-2272

DOI: 10.1093/ej/ueac021