Declining returns to education in Norway? Comparing estimates across cohorts, sectors and over time

We examine the role of the Norwegian education system in explaining the mod erate and stable earnings dispersion in Norway Estimating earnings equation s for 1980 and 1990, we find that returns to education have been remarkably stable in Norway also when we compare returns to education across differen t sectors of the economy. Our analysis controls for self-selection into edu cation by using an instrumental variable technique. We estimate separate ed ucation earnings profiles for different cohorts to identify the effect on w age premiums of the large changes that have taken place in the Norwegian ed ucation system. The substantially higher level of educational attainment fo r more recent cohorts does not, cet. par:, seem to have a negative effect o n educational wage premiums for these younger cohorts.