@article{b426324b0c684df580e8935c199aa3ad,
title = "The high-school dropout decision and its wage consequences",
abstract = "The purpose of this study is to investigate the wage consequences of leaving high school prior to graduation. The dropout process is modeled as interdependent events involving the dropout decision itself and expected wage offers. Since selectivity biases may occur in such models, our empirical analysis permits adjustment for any such biases. Our empirical results provide support for the existence of a self-selection bias in the initial work experiences following high school. We also find that wages for dropouts progressively decline in subsequent years relative to high-school graduates.",
author = "Arthur Blakemore and Low, {Stuart A.}",
note = "Funding Information: Our paper, like Hill{\textquoteright}s, examines the decision to drop out of high school and the impact of the decision on forthcoming wages. In a departure from previous studies, the expected wage impact of graduation is modeled so that it is interdependent with the selection rule concerning high-school completion. The decision to drop out, based on the general human-capital model, is assumed to depend on the expected wage premium attributable to the completion of high school. In turn, the wage depends upon whether the individual completed the high-school curricula, among other things. Under these circumstances it is possible that the act of dropping out is not properly treated as an exogenous event in the wage function of recent dropouts or graduates. Rather, the two relationships should be considered jointly.{\textquoteright} Furthermore, the standard approach (as used by Hill and Freeman) of regressing wages on a dummy variable indicating high-school dropout/graduation may suffer from a selectivity bias. The Heckman instrumental variable is used in * Funding for this study was provided through the Research Incentive Program, Arizona State University. [Manuscript received 17th June 1981; revision accepted for publication 27 July 1982.1 Copyright: Copyright 2014 Elsevier B.V., All rights reserved.",
year = "1984",
doi = "10.1016/0272-7757(84)90017-7",
language = "English (US)",
volume = "3",
pages = "111--119",
journal = "Economics of Education Review",
issn = "0272-7757",
publisher = "Elsevier Limited",
number = "2",
}