A note on occupational variations in the returns to education in the US labor market

Abstract

PurposeSeeks to answer the question: “do certain occupations offer lower financial benefits to acquiring years of formal schooling than others?”.Design/methodology/approachThis study uses data from the 2003 Current Population Survey to estimate rates of return to education across occupational categories in the US labor market. The wage model employed is based on the human capital model of income determination.FindingsThe analysis suggests that additional schooling has a positive impact on the weekly earnings of men and women in both white‐ and blue‐collar occupations – with the highest returns accruing to sales, managerial, and professional workers. Although returns are generally higher for white‐collar workers, no link is found between the returns to schooling and the propensity of occupations to be comprised of “primary” or “secondary” sector jobs.Originality/valueSupports the notion that additional schooling increases the earnings of men and women in both blue‐ and white‐collar occupations.