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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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01 Jul 2007
TL;DR: In Colombia, el acceso a la educación terciaria estaba restringido a individuos provenientes de hogares de ingresos altos, and the demanda de cupos no reaccionó de la same manera.
Abstract: ener acceso a educación superior en países en vías de desarrollo ó de bajos ingreso es un lujo que pocas personas tienen. En Colombia durante la mayor parte del siglo veinte, el acceso a la educación terciaria estaba restringido a individuos provenientes de hogares de ingresos altos. Con el objetivo de promover la entrada de un número mayor de estudiantes a instituciones universitarias, durante la década de 1990 el gobierno adelantó diferentes reformas. Estas reformas tuvieron un resultado positivo, por ejemplo, el número de cupos disponibles se duplicó de 1990 a 1998, pero la demanda de cupos no reaccionó de la misma manera. “A pesar de la expansión del sistema durante los 1990s, el número de nuevos ingresos a la educación terciaria comenzó a declinar en 1998” (Banco Mundial, 1995:25). La decisión de vincularse a una institución de educación superior en estos países se ve afectada por dos factores, el acceso a recursos necesarios para continuar estudiando y la percepción de un nivel de utilidad superior por parte de las familias. Los determinantes de optar por la educación superior pueden ser estudiados desde múltiples perspectivas. Al observarlos desde una sola perspectiva obtenemos información parcial sobre los aspectos relevantes. Algunos estudios que analizan elección consideran factores tales como características familiares, las opciones que brinda la sociedad (representadas tanto por las políticas “LA NOCTURNA”: ESTUDIO DE LA ELECCIÓN EDUCATIVA EN COLOMBIA
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01 Jan 2015
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TL;DR: In particular, this paper found that the relationship between capital humano and resultados in el mercado laboral esta determinada by the coevolucion of two dimensions: habilidades cognitivas and estructuras institucionales.
Abstract: La correlacion entre educacion y resultados economicos es una conclusion con gran soporte empirico en decadas recientes; de ahi el empeno de los paises en que los estudiantes adquieran habilidades cognitivas. La literatura economica de la ultima decada ha hecho uso de los tests internacionales para analizar los determinantes e impacto de las habilidades cognitivas. El trabajo aborda la idea de que la relacion entre capital humano y resultados en el mercado laboral esta determinada por la coevolucion de dos dimensiones principales; habilidades cognitivas y estructuras institucionales. El analisis empirico hace uso de indicadores de algunas habilidades que definen el capital humano, en un panel de 51 paises de 1990-2012. Los resultados parecen indicar que la dinamica en los resultados del mercado laboral esta dirigida por la interaccion de las variables: capital humano e infraestructura, que difieren y ofrecen patrones especificos en sistemas nacionales o regionales caracterizados por diferentes niveles de desarrollo.
1 citations
15 May 2015
TL;DR: This article found that educational attainment is an important causal factor in determining labor market outcomes, social status, physical and mental health, marriage and fertility, civic participation, and social attitudes, and that after controlling for individual educational attainment, aggregate levels of education can affect economic and non-economic outcomes at both the aggregate and individual level.
Abstract: Social scientists have found strong and persistent causal effects of education on various outcomes over the life course, even after using various methods to control for pre-existing selection into educational treatments. Research suggests that educational attainment is an important causal factor in determining labor market outcomes, social status, physical and mental health, marriage and fertility, civic participation, and social attitudes. As education plays a central role in the causal processes of so many outcomes of interest, understanding the effects of education is a primary concern to social scientists. The effects of education are complex and vary across demographic groups, appearing greatest for marginal students. Furthermore, after controlling for individual educational attainment, aggregate levels of education can affect economic and non-economic outcomes at both the aggregate and individual level. Building on the literature on the effects of education, we suggest promising areas for future research, including: assessing effect heterogeneity across individual and contextual characteristics; rigorously identifying and testing causal pathways and mechanisms that link education to associated outcomes; and attending to equilibrium effects, where aggregate levels of education may influence the relationship between individual education and a variety of individual outcomes.
1 citations
TL;DR: This paper analyzed the relationship between education and criminal behavior based on a survey of nearly 700 North American female escorts who provide (typically illegal) prostitution services and found that college-educated women are less likely to see clients in any given week and do not earn higher average hourly wages.
Abstract: We analyze the relationship between education and criminal behavior based on a survey of nearly 700 North American female escorts who provide (typically illegal) prostitution services. Nearly 40%, of the women in our sample report college completion. College-educated women are less likely to see clients in any given week and do not earn higher average hourly wages. However, conditional on seeing any clients, college-educated prostitutes see more clients and provide longer client sessions. We demonstrate that these results are consistent with a model in which college-educated prostitutes have better outside options to prostitution, but are also able to reduce the marginal disutility of prostitution work by attracting fewer unpleasant clients and by combining sexual services with non-sexual services such as companionship, where college education may be productive.
1 citations