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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: In this article, the authors provided causal evidence on the long-term consequences of large-scale physical destruction on educational attainment, health status, and labor market outcomes of children in Germany during World War Two.
Abstract: This paper provides causal evidence on the long-term consequences of large-scale physical destruction on educational attainment, health status, and labor market outcomes of children. I exploit the plausibly exogenous region-by-cohort variation in the intensity of World War Two (WWII) destruction as a unique quasi-experiment. I find that exposure to destruction had long-lasting detrimental effects on the human capital formation, health, and labor market outcomes of Germans who were at school-age during WWII. An important channel for the effect of destruction on educational attainment is the destruction of schools whereas malnutrition is partly behind the estimated impact on health.
130 citations
TL;DR: In this paper, the authors examine the linkages between population, economic development, employment, education, health, social equity, cultural values, energy intensity and sustainability in the context of evolving human consciousness.
Abstract: A study of sustainability needs to consider the role of all forms of capital—natural, biological, social, technological, financial, cultural—and the complex ways in which they interact. All forms of capital derive their value, utility and application from human mental awareness, creativity and social innovation. This makes human capital, including social capital, the central determinant of resource productivity and sustainability. Humanity has entered the Anthropocene Epoch in which human changes have become the predominant factor in evolution. Humanity is itself evolving from animal physicality to social vitality to mental individuality. This transition has profound bearing on human productive capabilities, adaptability, creativity and values, the organization of economy, public policy, social awareness and life styles that determine sustainability. This article examines the linkages between population, economic development, employment, education, health, social equity, cultural values, energy intensity and sustainability in the context of evolving human consciousness. It concludes that development of human capital is the critical determinant of long-term sustainability and that efforts to accelerate the evolution of human consciousness and emergence of mentally self-conscious individuals will be the most effective approach for ensuring a sustainable future. Education is the primary lever. Human choice matters.
129 citations
TL;DR: In this article, the relationship between breastfeeding history and 15 indicators of physical health, emotional health, and cognitive ability, using ordinary least squares and logit regression, was examined, in addition to the usual between-family model, to see whether differences in siblings' outcomes are associated with differences in the siblings' breastfeeding histories.
Abstract: Objective
Better measurement of the health and cognitive benefits of breastfeeding by using sibling comparisons to reduce sample selection bias.
Data
We use data on the breastfeeding history, physical and emotional health, academic performance, cognitive ability, and demographic characteristics of 16,903 adolescents from the first (1994) wave of the National Longitudinal Study of Adolescent Health. The sample includes 2,734 sibling pairs.
Study Design
We examine the relationship between breastfeeding history and 15 indicators of physical health, emotional health, and cognitive ability, using ordinary least squares and logit regression. For each indicator, we estimate, in addition to the usual between-family model, a within-family model to see whether differences in siblings' outcomes are associated with differences in the siblings' breastfeeding histories.
Principal Findings.
Nearly all of the correlations found in the between-family model become statistically insignificant in the within-family model. The notable exception is a persistent positive correlation between breastfeeding and cognitive ability. These findings hold whether breastfeeding is measured in terms of duration or as a Yes/No variable.
Conclusions
This study provides persuasive evidence of a causal connection between breastfeeding and intelligence. However, it also suggests that nonexperimental studies of breastfeeding overstate some of its other long-term benefits, even if controls are included for race, ethnicity, income, and education.
The definitive version is available at www.blackwell-synergy.com
129 citations
TL;DR: This article reviewed the economic literature on the determinants of schooling outcomes and schooling gaps with a focus on static and dynamic household responses to specific policy initiatives, perceived economic returns and other incentives.
Abstract: In developing countries, rising incomes, increased demand for more skilled labor, and government investments of considerable resources on building and equipping schools and paying teachers have contributed to global convergence in enrollment rates and completed years of schooling. Nevertheless, in many countries substantial education gaps persist between rich and poor, between rural and urban households and between males and females. To address these gaps, some governments have introduced school vouchers or cash transfers programs that are targeted to disadvantaged children. Others have initiated programs to attract or retain students by expanding school access or by setting higher teacher eligibility requirements or increasing the number of textbooks per student. While enrollments have increased, there has not been a commensurate improvement in knowledge and skills of students. Establishing the impact of these policies and programs requires an understanding of the incentives and constraints faced by all parties involved, the school providers, the parents and the children. The chapter reviews the economic literature on the determinants of schooling outcomes and schooling gaps with a focus on static and dynamic household responses to specific policy initiatives, perceived economic returns and other incentives. It discusses measurement and estimation issues involved with empirically testing these models and reviews findings. Governments have increasingly adopted the practice of experimentation and evaluation before taking steps to expand new policies. Often pilot programs are initiated in settings that are atypically appropriate for the program, so that the results overstate the likely impact of expanding the program to other settings. Program expansion can also result in general equilibrium feedback effects that do not apply to isolated pilots. These behavioral models provide a useful context within which to frame the likely outcomes of such expansion.
129 citations
TL;DR: It is demonstrated that the 610% increase in Medicaid spending on antipsychotic drugs during the study period caused by the shift to three new treatments has not reduced spending on other types of medical care, thus undermining the hypothesis that the drugs have "paid for themselves."
128 citations