Posted Content•
The causal effect of education on earnings
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.
Citations
More filters
TL;DR: In this paper, a detailed review of the main microeconomic and macroeconomic principles used to measure returns to education in Sub-Saharan countries is presented. But the authors are also interested in major problems they encountered in empirically applying these models.
Abstract: This paper presents a detailed review of the main microeconomic and macroeconomic principles used to measure returns to education. We are also interested in major problems we encountered in empirically applying these models. The change in returns to higher learning in Sub-Saharan education is compared with returns to other levels of education. A meta-analysis method is applied to the results of a series of works on returns to higher education in Sub-Saharan countries.
22 citations
TL;DR: In this paper, the role of work-related training and hourly wages for private sector men in ten European Union countries was investigated using both ordinary least squares and quantile regression techniques.
Abstract: Recent studies have used quantile regression (QR) techniques to estimate the impact of education on the location, scale and shape of the conditional wage distribution. We conduct a similar investigation of the role of work-related training. We utilise both ordinary least squares and QR techniques to estimate associations between work-related training and wages for private sector men in ten European Union countries. For the majority of countries, the association between training and hourly wages varies little across the conditional wage distribution. However, there are considerable differences across countries in mean associations between training and wages.
22 citations
TL;DR: This article found that an increase in parental education reduces delinquent behavior among the children of those exposed to compulsory schooling laws in the United States, and they concluded that previous analyses of education and investments in education more generally − appreciably underestimate the full benefits of investment in education.
Abstract: Children of less educated parents are more likely to engage in delinquent behavior. One explanation for this is that better educated parents are inherently more likely to raise children in ways that are less conducive to criminal participation. Alternatively, additional parental education may change parents’ behavior in ways that reduces their children’s propensity to commit crime. Using data from the NLSY79 and variation induced by changes in compulsory schooling laws in the United States, we find that an increase in parental education reduces delinquent behavior among the children of those exposed to compulsory schooling laws. This research is the first to uncover evidence of an intergenerational effect of education on crime in the United States. We conclude that previous analyses of compulsory schooling laws − and investments in education more generally − appreciably underestimate the full benefits of investments in education.
22 citations
TL;DR: In this paper, the authors compare successive age cohorts of three broad social groups (SC-STs, Other Backward Classes (OBCs) and others) and provide the first disaggregated picture of the evolution of intercaste disparities in India.
22 citations
TL;DR: In this paper, the authors used a sample of more than 200 metropolitan areas in the United States over the years 1980, 1990, and 2000 to investigate the relationship between education and human capital growth.
Abstract: Human capital is typically viewed as generating a number of desirable outcomes, including economic growth. Yet, in spite of its importance, few empirical studies have explored why some economies accumulate more human capital than others. This paper attempts to do so using a sample of more than 200 metropolitan areas in the United States over the years 1980, 1990, and 2000. The results reveal two consistently significant correlates of human capital growth, defined as the change in a city's rate of college completion: population and the existing stock of college-educated labor. Given that population growth and human capital accumulation are both positively associated with education, these results suggest that the geographic distributions of population and human capital should have become more concentrated in recent decades. That is, larger, more educated metropolitan areas should have exhibited the fastest rates of increase in both population and education and thus 'pulled away' from smaller, less-educated metropolitan areas. The evidence largely supports this conclusion.
22 citations