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The causal effect of education on earnings

01 Jan 1999-Handbook of Labor Economics (Elsevier)-pp 1801-1863
TL;DR: This paper surveys the recent literature on the causal relationship between education and earnings and concludes that the average (or average marginal) return to education is not much below the estimate that emerges from a standard human capital earnings function fit by OLS.
Abstract: This paper surveys the recent literature on the causal relationship between education and earnings. I focus on four areas of work: theoretical and econometric advances in modelling the causal effect of education in the presence of heterogeneous returns to schooling; recent studies that use institutional aspects of the education system to form instrumental variables estimates of the return to schooling; recent studies of the earnings and schooling of twins; and recent attempts to explicitly model sources of heterogeneity in the returns to education. Consistent with earlier surveys of the literature, I conclude that the average (or average marginal) return to education is not much below the estimate that emerges from a standard human capital earnings function fit by OLS. Evidence from the latest studies of identical twins suggests a small upward "ability" bias -- on the order of 10%. A consistent finding among studies using instrumental variables based on institutional changes in the education system is that the estimated returns to schooling are 20-40% above the corresponding OLS estimates. Part of the explanation for this finding may be that marginal returns to schooling for certain subgroups -- particularly relatively disadvantaged groups with low education outcomes -- are higher than the average marginal returns to education in the population as a whole.
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Journal ArticleDOI
TL;DR: School-based interventions should address the multiple facets of high school experiences to help adolescents successfully complete their basic schooling and create a positive social-emotional learning environment to contribute to a healthier lifestyle.
Abstract: BACKGROUND: High school dropout represents an important public health issue. This study assessed the 3 distinct dimensions of student engagement in high school and examined the relationships between the nature and course of such experiences and later dropout. METHODS: We administered questionnaires to 13,330 students (44.7% boys) from 69 high schools in the province of Quebec (Canada). During 3 consecutive high school years, students reported their behavioral, emotional, and cognitive engagement to school. Information on later dropout status was obtained through official records. RESULTS: Although many adolescents remained highly engaged in high school, one third reported changes, especially decreases in rule compliance, interest in school, and willingness to learn. Students reporting low engagement or important decrements in behavioral investment from the beginning of high school presented higher risks of later dropout. CONCLUSION: School-based interventions should address the multiple facets of high school experiences to help adolescents successfully complete their basic schooling. Creating a positive social-emotional learning environment promises better adolescent achievement and, in turn, will contribute to a healthier lifestyle.

417 citations

Journal ArticleDOI
TL;DR: In this paper, the impact of family background on young people's educational attainments was investigated using data from the British Household Panel Study (BHPWS) for the first seven years (1991-97).
Abstract: The analysis uses new data matching parents and their young adult children to study the impact of family background on young people's educational attainments. The data is derived from the first seven years (1991-97) of the British Household Panel Study. Parents' educational attainments are found to be very strongly associated with their children's educational attainments, and for an important part of the population these associations can be given a causal interpretation. In addition, young adults who experience single parenthood as children and those who come from families in the bottom income quartile have significantly lower educational attainments.

416 citations

Journal ArticleDOI
TL;DR: In this paper, returns to education are used to address the relation between schooling and wage inequality, and the results suggest that schooling has a positive impact upon within-levels wage inequality and that factors such as over-education, ability, schooling interactions and school quality or different fields of study may be driving this result.

409 citations

Journal ArticleDOI
T. Paul Schultz1
TL;DR: This article argued that women and men often receive the same percentage increase in their wage rates with advances in schooling, and that the marginal returns for women will tend to exceed those for men, especially in countries where women are much less educated.

389 citations

Journal ArticleDOI
TL;DR: The authors used data on more than 1,000 political leaders between 1875 and 2004 to investigate whether having a more educated leader affects the rate of economic growth and provided evidence supporting the view that heterogeneity among leaders' educational attainment is important with growth being higher by having leaders who are more highly educated.
Abstract: This article uses data on more than 1,000 political leaders between 1875 and 2004 to investigate whether having a more educated leader affects the rate of economic growth. We use an expanded set of random leadership transitions because of natural death or terminal illness to show, following an earlier paper by Jones and Olken (2005), that leaders matter for growth. We then provide evidence supporting the view that heterogeneity among leaders’ educational attainment is important with growth being higher by having leaders who are more highly educated.

388 citations