Based on the traditional human capital framework, we estimate rates of return to education by gender in Spain and analyze the earnings premium associated with different types of diploma. To that end, we adjust mincerian earnings functions controlling the wage-generating process for education and professional experience. We correct the earnings equations for selectivity bias using the results of a multinomial employment sector choice model. Our empirical results are based on data from the first wave of the “Panel de Hogares de la Unión Europea para España” (INE, 1994). Compared with other sources of information used in previous empirical works, this data set provides exact information on the years of schooling and professional experience of each worker.

Key words: return to education, earnings functions, selectivity bias, wage earners.
JEL classification: J31, I21.