Returns to education in Israel: 1974 and 1983

In a comparison of the Israel labor market between 1974 and 1983, it was found that both higher wages and age-earnings profiles were related to higher educational levels, and that for higher educational levels the age-earnings profiles present steeper parabolic shapes. Earnings peak for higher educational levels at later ages was found only for 1974, but not for 1983. For all age groups, estimated coefficients of education are higher in 1983 than in 1974, while the difference between corresponding estimates from the two years increases with the rise in level of education. Interpretation of these empirical findings is related to the substantial technological progress experienced between 1974 and 1983.