IN this paper is examined some of the determinants of earnings of males in a high powered occupation, chemical engineering. Models such as those developed here can be useful to researchers interested in earnings functions, the theory of occupational choice, economic growth and returns to investments in human capital. In addition, earnings models can be help'ful to individuals who must make promotion and salary decisions. The impact of education on earnings has received a great deal of attention in social, political and economic circles. Previous studies show that persons who obtain higher levels of education earn higher incomes. However, comparing average incomes of individuals who differ only in levels of educational attainment may overstate the influence of education since schooling and non-schooling factors other than the amount of formal schooling cause differences in individual incomes. Such factors include socio-economic background, demographic characteristics, innate ability and the quality of formal education. Emphasis in this study is on the quality of education and student ability. The author was able to find only two attempts at simultaneously estimating the impact of student ability and school quality on the earnings of persons in professional occupations.' This paper is viewed as an exploratory effort in this direction. The basic earnings functions to be estimated are described in section I. The data sources, key proxy variables in the regression analysis and the regression findings are discussed in section II. Section III is a summary of the main findings.

models where only years of education, but no quality measures, were included, returns to education declined for both blacks and whites in older cohorts. The interesting result from Welch's point of view was that the percentage returns to black education fell off appreciably faster compared to whites as the cohort aged. The implication is that blacks have been gaining with respect to whites as far as returns to education are concerned. Welch observed that this gain to blacks is likely to be due to a recent rise in the quality of education for blacks relative to whites. From a policy point of view, this leads to the conclusion that, however limited its role may be, education still is a potential policy tool with which to reduce observed racial earnings differences. The basic problem with Welch's results is that the observed decline in the returns to education for older blacks could have oc

Anne Case et al. (2002), using cross-sectional data, found a positive relationship between children's health and income, with income's protective effect increasing with age. Janet Currie and Mark Stabile (2003), using a panel of Canadian children, found that low- and high-SES children respond similarly to health shocks, but the low-SES children are subject to more shocks as they age. Our study examines this relationship using panel data for US children. We find some support for the latter result of Currie and Stabile, but also evidence that low- and high-SES children respond differently to specific health shocks. (JEL D31, I12, J13)

Recent studies have documented a significant rise in the male black-white earnings ratio since the mid-1960s. The growing difference in nonemployment rates of blacks and whites clouds these optimistic findings. The basic question addressed in this paper is whether selectivity bias, caused by racial differences in employment rates, is a serious problem in the estimation of wage functions for adult males. For males age 21-34 we found no evidence of selectivity bias, but for the older cohort of males age 35-54, the results are quite different. For both whites and blacks, there is strong positive selection bias. It appears that biased estimates of several important coefficients are obtained using simple ordinary least squares procedures. The most interesting of these are the effect of low education for blacks.

Charles R. Link, Edward C. Ratledge, The Influence of the Quantity and Quality of Education on Black-White Earnings Differentials: Some New Evidence, The Review of Economics and Statistics, Vol. 57, No. 3 (Aug., 1975), pp. 346-350