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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.
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TL;DR: This article found that second-generation immigrants are on average less likely to experience education success than their native counterparts, with the education gap mainly being rooted in ethnic differences in family backgrounds, and while second generation immigrants have on average a lower probability of employment and lower wages than natives, both gaps are mainly explained by the differences in education.
Abstract: We use data from the Trajectoires et Origines survey to analyze ethnic gaps in education and labor-market outcomes between second-generation immigrants and their French-native counterparts. Our three main findings underscore the importance of family background in explaining lifelong ethnic inequalities. First, second-generation immigrants are on average less likely to experience education success than their native counterparts, with the education gap mainly being rooted in ethnic differences in family backgrounds. Second, while second-generation immigrants have on average a lower probability of employment and lower wages than natives, both gaps are mainly explained by the differences in education. Third, we find considerable heterogeneity across ethnic groups.
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TL;DR: In this paper, the authors elicit willingness to pay for the Kentucky Community and Technical College System directly through a stated-preferences survey and compare their estimate of total social value to their estimates of private value in the form of increased earnings.
Abstract: Much is known about private returns to education in the form of higher earnings. Less is known about social value, over and above the private, market value. Associations between education and socially-desirable outcomes are strong, but disentangling the effect of education from other causal factors is challenging. The purpose of this paper is to estimate the social value of one form of higher education. We elicit willingness to pay for the Kentucky Community and Technical College System directly through a stated-preferences survey and compare our estimate of total social value to our estimates of private value in the form of increased earnings. Our earnings estimates are based on two distinct data sets, one administrative and one from the U.S. Census. The difference between the total social value and the increase in earnings is our measure of the education externality. Our work differs from previous research by eliciting values directly in a way that yields a total value including any external benefits and by focusing on education at the community college level. Our preferred estimate indicates the social value of expanding the system substantially exceeds private value by approximately 50 percent.
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TL;DR: This paper found that trust in people, trust in politicians, and trust in government are positively and significantly correlated using the OLS method using data from the British Social Attitudes Survey (BSAS).
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TL;DR: In this article, the authors used a quasi-experimental propensity score matching and OLS methods followed by a series of robustness tests that validated the unconfoundedness and overlapping assumptions.
Abstract: School bullying is a serious problem in academic settings all over the world. Using data from Ghana through the Trends in International Mathematics and Science Study we show that bullying has a negative effect on academic performance. We also find evidence that female students are more affected by bullying. However, our analysis of the data reveals a female teacher in the classroom diminishes the negative effect of bullying on female students. The analysis uses a quasi-experimental propensity score matching and OLS methods followed by a series of robustness tests that validates the unconfoundedness and overlapping assumptions. The results of the study encourage policy makers to introduce gender sensitive anti-bullying program in academic settings.
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TL;DR: This paper study the effect of fertility on labor supply in Argentina and Mexico exploiting a source of exogenous variability in family size first introduced by Angrist and Evans (1998) for the United States.
Abstract: We study the effect of fertility on labor supply in Argentina and Mexico exploiting a source of exogenous variability in family size first introduced by Angrist and Evans (1998) for the United States. Our results constitute the first exte rnal validation of the estimates obtained for the US. External validation of empirical results is centr al to the making of rigorous science, but there are very few attempts to establish it. We find th at the estimates for the US can be generalized both qualitatively and quantitatively to the populati ons of two developing countries where, compared to the US, fertility is known to be higher, female education levels are much lower and there are fewer facilities for childcare.
11 citations