Three essays on human capital
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The first essay evaluates the relationship between language skills and earnings. Unlike previous studies that analyze the relationship between English skills and earnings, this study uses both subjective measures and objective measures of English skills. The results suggest that the self-reported ability to speak English well and the self-reported ability to write English well are the most powerful predictors of earnings even when controlling for English language skills with objective measures. vi The second essay evaluates how ending affirmative action in public colleges in Texas affected the percent of minority high school graduates applying to college. I find the end of affirmative action significantly lowered the percent of Hispanic students applying to college by 1.6 percentage points and significantly lowered the percent of black students applying to college by 2.1 percentage points. The end of affirmative action in public colleges in Texas did not significantly affect the percent of white students applying to college. In 1997, the Texas state legislature passed a percent plan that guarantees students who graduate in the top ten percent of their high school class admission to any public college in Texas. The percent of minority students applying to college increased significantly when the percent plan was accompanied by changes in financial aid. The third essay evaluates wage differentials between the public sector and the private sector. This study uses employee preferences for job security and employee preferences for non-pecuniary sector characteristics to instrument for the selection of workers into each sector. The results reveal a significant wage penalty to being employed in the public sector in Bangladesh, Bulgaria, Cyprus, Denmark, Norway, Poland and Switzerland. Private sector workers are significantly positively selected in 12 out of 18 countries and public sector workers in Cyprus, Germany, and Hungary are significantly negatively selected.