Returns to education and wage equations

The paper shows why considering a number of education-dependent covariates in a wage equation decreases the coefficient of education in that equation. This result is illustrated empirically with a meta-analysis for Portugal. The education coefficient decreases when covariates are used that can be considered post-education decisions; on the other hand, it is independent of sample size, tenure and whether hourly or monthly wages are used. These results support the use of a simple specification of the Mincer equation for the study of the total returns to education. Although the debate on the causal link between education and productivity is still ongoing, policymakers are already drawing on results from Mincer equations to support their decisions regarding the optimal private cost of (higher