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Title: Identifying and Estimating Ability from Nonlinear Human Capital Earnings Functions
Resulting in 1 citation.
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Thamma-Apiroam, Rewat |
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Identifying and Estimating Ability from Nonlinear Human Capital Earnings Functions Ph.D. Dissertation, State University of New York at Binghamton, 2009 Cohort(s): NLSY79 Publisher: ProQuest Dissertations & Theses (PQDT) Keyword(s): Achievement; Armed Services Vocational Aptitude Battery (ASVAB); Cognitive Ability; Earnings; I.Q.; Intelligence Tests; Test Scores/Test theory/IRT; Tests and Testing Permission to reprint the abstract has not been received from the publisher. In the framework of optimal human capital accumulation theory, the typical Mincerian earnings function cannot properly characterize the role of ability so that theoretical development for identifying such ability is necessary. Through a closed-form solution of the earnings function, a modified version of Ben-Porath and Haley human capital investment models has been proposed. Not only does this adapted earnings function provide a number of meaningful parameters such as the initial human capital endowment and the rate of return to schooling, but it also allows the ability parameter to be identified in a practical fashion. This study, therefore, takes advantage of such a framework by pinpointing and estimating the earnings functions with the nonlinear least squares technique. Various demographic groups are employed to estimate the ability parameter. Subsequently, as an application to this explicitly closed-form solution, the data on independent ability measures such as IQ and aptitude tests are utilized to compare with the ability parameter. The vital aim is to establish a relationship between the ability parameter obtained from the nonlinear earnings function in economics and the ability measures mostly developed from the psychology discipline. The empirical results reveal no racial bias for ability estimation. Furthermore, utilizing the same procedure through group and individual data gives a consistent result. There exits a relatively strong relation between ability estimates and IQ scores across a diverse range of independent general cognitive ability and aptitude tests, all from the NLSY79 data. However, at the individual level, the correlation coefficients are somewhat weaker than those from group estimation. In conclusion, an alternative ability measure through ability parameter has been originally developed which links the economics and psychology disciplines. |
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Bibliography Citation
Thamma-Apiroam, Rewat. Identifying and Estimating Ability from Nonlinear Human Capital Earnings Functions. Ph.D. Dissertation, State University of New York at Binghamton, 2009. |