In this paper we consider the basic self-selection model for the effects of education, training, unions, and other activities on wages. We show that past models have ignored 'heterogeneity of rewards' to the activity--i.e., differences across individuals in the rate of return to the activity--as a source of selection bias. We model such heterogeneity, show how its presence can be tested, and draw out its implications for the wage and welfare gains to the activity. An empirical application provides strong support for such heterogeneity.

We use unique Swedish data with information on adopted children's biological and adoptive parents to estimate intergenerational mobility associations in earnings and education. We argue that the impact from biological parents captures broad prebirth factors, including genes and prenatal environment, and the impact from adoptive parents represents broad postbirth factors, such as childhood environment. We find that both pre- and postbirth factors contribute to intergenerational earnings and education transmissions, and that prebirth factors are more important for mother's education and less important for father's income. We also find some evidence for a positive interaction effect between postbirth environment and prebirth factors.

Using 1998 data, we show that the gender log wage gap in Sweden increases throughout the wage distribution and accelerates in the upper tail. We interpret this as a strong glass ceiling effect. We use quantile regression decompositions to examine whether this pattern can be ascribed primarily to gender differences in labor market characteristics or in the rewards to those characteristics. Even after extensive controls for gender differences in age, education (both level and field), sector, industry, and occupation, we find that the glass ceiling effect we see in the raw data persists to a considerable extent.