The Contribution of Education to the Quality of Labor: Reply
The bias toward understatement in reported agricultural earnings may be offset by the other sources of error which Denison mentions. Denison's footnote at this point, however, refers to another source of downward bias in agricultural earnings as a meameasure of labor quality: the preference of agricultural labor for farm life and resulting immobility. Denison chooses to include the influence of immobility in the 'ability' adjustment. The evidence relating to the contribution of ability to education earnings differentials is sufficiently fragmentary to permit Denison to come to this decision. My own interpretation of the available evidence is that ascribing two-fifths of the educational differentials in earnings to ability alone does not overstate abilitv's contribution;' I would not include in the two-fifths the influence of other nonschooling variables. My method of adjusting for agricultural immobility as well as for other sources of bias in agricultural earnings as reported is to use Victor Fuchs' estimates of educational earnings differentials based on a sample which excludes agricultural workers.
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