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Overcoming Bias Commenter's avatar

Basically, before one can attribute the rise in the earnings coefficient to education increasing value, one must control for any inflation in job requirements.

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Overcoming Bias Commenter's avatar

The coefficient on returns to education had, in fact,significantly increased at the same time as did the percentage of the population with a diploma and with a bachelor’s degree.

It's not impossible for the coefficient to increase under a signaling scenario. If a lot of jobs that previously required only a HS diploma started requiring college degrees and represented the upper tier of salaries achievable with a HS degree, then the average salary would fall for both, but the relative change would be dependent on how far above or below the respective means the jobs were.

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