Education and labor market outcome—Wage equation estimation with QLFS data

This paper investigates the impact of education on individual wages, aiming to provide empirical evidence on the causal effect of schooling. The theoretical framework is based on Mincer's human capital model, which is extended to account for health status. The methods involve OLS and IV estimation using recent nationwide survey data. The key results indicate that each additional year of schooling has a positive and significant effect on wages. The magnitudes of OLS and IV estimates are similar, suggesting that ability bias may not be severe. The findings confirm human capital theory that education improves labor market outcomes and drives wage inequality. The conclusion is that expanded access to education, especially for disadvantaged groups, can help reduce income disparities. Implications are discussed for education policy. The paper contributes additional empirical evidence to the literature on the returns to schooling.