# 11-045/3 (2011-02-22)

Jacopo Mazza, University of Amsterdam; Hans van Ophem, University of Amsterdam; Joop Hartog, University of Amsterdam
wage inequality, wage uncertainty, unobserved heterogeneity, selectivity, education, replication
JEL codes:
C01, C33, C34, J31

We apply a recently proposed method to disentangle unobserved heterogeneity from risk in returns to education. We replicate the original study on US men and extend to US women, UK men and German men. Most original results are not robust. A college education cannot universally be considered an insurance against unpredictability of wages. One conclusion is unequivocally confirmed: uncertainty strongly dominates unobserved heterogeneity.