TY  - JOUR
AU  - Cunha,Flavio
AU  - Heckman,James J.
AU  - Navarro,Salvador
TI  - Separating Uncertainty from Heterogeneity in Life Cycle Earnings
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11024
PY  - 2005
Y2  - January 2005
UR  - http://www.nber.org/papers/w11024
L1  - http://www.nber.org/papers/w11024.pdf
N1  - Author contact info:
Flavio Cunha
Department of Economics
University of Pennsylvania
160 McNeil Building
3718 Locust Walk
Philadelphia, PA 19104-6297
Tel: 215/898-5652
E-Mail: fcunha@sas.upenn.edu

James J. Heckman
Department of Economics
The University of Chicago
1126 E. 59th Street
Chicago, IL 60637
Tel: 773/702-0634
Fax: 773/702-8490
E-Mail: jjh@uchicago.edu

Salvador Navarro
Department of Economics
Social Science Centre, Room 4071
London, Ontario, Canada, N6A 5C2
Tel: 519 661-3500
Fax: 519 661-3666
E-Mail: snavarr@uwo.ca
AB  - 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.
ER  -