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 article, a new age-period-cohort-trended lag (APCTLAG) method was used to compare the gap in economic returns between tertiary and less than tertiary education over cohorts.
Abstract: In many countries, the skilled labor market has lagged educational expansion. As a result of increased competition, younger cohorts of the highly educated face decreasing returns to education or overeducation. Surprisingly, decreasing occupational outcomes do not coincide empirically with the economic returns among those with tertiary education. Regarding the process of changes in economic returns to education based on cohort transformations, we expect that the expansion of tertiary education affects specific cohorts, which find themselves facing more labor market competition. As a result, the economic returns to education should decrease among younger cohorts even when the overall returns to education remain stable over time. To study this process, we model economic returns with a new age-period-cohort-trended lag (APCTLAG) method, which allows us to compare the gap in economic returns between tertiary and less than tertiary education over cohorts. Using the Luxembourg Income Study (LIS), we analyze trends over three decades in 12 countries. Our results confirm that educational returns for tertiary education have declined over time, even though the gap between the educated and the less educated has remained similar in most of the countries. For younger cohorts, tertiary education has become more necessary to survive in the competitive labor market, but the actual economic returns have decreased—making tertiary education less sufficient than before.
16Â citations
Posted Content•
TL;DR: In this paper, the effect of school starting age on academic performance for Hungarian grade four students using the PIRLS and TIMMS was estimated using the control function approach, exploiting the exogenous variation in school starting ages driven by the children's month of birth and the cut-off date regulation for enrolment.
Abstract: The study estimates the effect of school starting age on academic performance for Hungarian grade four students using the "Progress in International Reading Literacy Study" (PIRLS) and the "Trends in Mathematics and Science Study" (TIMMS). The study uses the control function approach, exploiting the exogenous variation in school starting age driven by the children's month of birth and the cut-off date regulation for enrolment. The results indicate a positive age effect on Reading, Mathematics and Science performance.
16Â citations
01 Jan 2006
TL;DR: In this paper, an indicator of whether an Internet connection is available at home is used as an instrument for the years of schooling of the household head, and the results indicate that an additional year of schooling increases wage rates by 22 percent.
Abstract: In this paper we analyze the economic returns to schooling in Uruguay. Instrumental variables are used to estimate mean and quantile regressions. An indicator of whether an Internet connection is available at home is used as an instrument for the years of schooling of the household head. The evidence shows that the simple Mincer OLS estimates are downward biased. When estimates are controlled for measurement error in schooling reports the results indicate that an additional year of schooling increases wage rates by 22 percent.
16Â citations
TL;DR: Whether 25-OHD is likely to be causally associated with CRC, or vice versa, is investigated by selecting the best modelling hypothesis according to Bayesian predictive scores and consistency is examined for a range of prior assumptions.
Abstract: Introduction
Vitamin D deficiency has been associated with increased risk of colorectal cancer (CRC), but causal relationship has not yet been confirmed. We investigate the direction of causation between vitamin D and CRC by extending the conventional approaches to allow pleiotropic relationships and by explicitly modelling unmeasured confounders.
16Â citations
TL;DR: In this article, the authors investigated the effect of an intensive coaching program aimed at reducing school dropout rates among students aged 16-20, and found that one year of coaching significantly reduced the dropout rate from 17 to 10 percentage points.
16Â citations