Separating Uncertainty from Heterogeneity in Life Cycle Earnings
This paper develops and applies a method for decomposing cross section variability of earnings into components that are forecastable at the time students decide to go to college (heterogeneity) and components that are unforecastable. About 60% of variability in returns to schooling is forecastable. This has important implications for using measured variability to price risk and predict college attendance.
-
-
Copy CitationFlavio Cunha, James J. Heckman, and Salvador Navarro, "Separating Uncertainty from Heterogeneity in Life Cycle Earnings," NBER Working Paper 11024 (2005), https://doi.org/10.3386/w11024.
Published Versions
Cunha, Flavio, James Heckman and Salvador Navarro. "Separating Uncertainty From Heterogeneity In Life Cycle Earnings," Oxford Economic Papers, 2005, v57(2,Apr), 191-261. citation courtesy of 
More from the NBER
In addition to working papers, the NBER disseminates affiliates’ latest findings through a range of free periodicals — the NBER Reporter, the NBER Digest, the Bulletin on Health, and the Bulletin on Entrepreneurship — as well as online conference reports, video lectures, and interviews.
