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, the authors used data from the National Longitudinal Survey of Youth 1997 (NLSY97) to analyze factors influencing students' college application decisions, with a focus on the decision to apply to a selective 4-year college.
107 citations
TL;DR: In this article, the authors consider the uneven capacity of parents to invest in children, the impact of mothers' employment on child outcomes, and the potential benefits of early pre-school programs.
Abstract: The skills needed to ensure good life chances are rising (and changing) and, despite decades of education reforms, there has been little progress in terms of equalizing opportunities. The impact of social origins on child outcomes persists, and may even strengthen. This suggests that the pursuit of more equality and future productivity come together. A major challenge is to minimize the dispersion of skills. The foundations of policy lie in the realization that learning abilities are formed during the first years of childhood. The pursuit of an optimal human capital policy needs to consider three issues: (1) the uneven capacity of parents to invest in children; (2) the impact of mothers’ employment on child outcomes; and, (3) the potential benefits of early pre-school programmes.
107 citations
Posted Content•
TL;DR: Prior seasonality-in-fertility research focuses on conditions at conception; here, expected conditions at birth drive variation in maternal characteristics, while conditions at conceived are unimportant.
Abstract: Research has found that season of birth is associated with later health and professional outcomes; what drives this association remains unclear. In this paper we consider a new explanation: that children born at different times in the year are conceived by women with different socioeconomic characteristics. We document large seasonal changes in the characteristics of women giving birth throughout the year in the United States. Children born in the winter are disproportionally born to women who are more likely to be teenagers and less likely to be married or have a high school degree. We show that controls for family background characteristics can explain up to half of the relationship between season of birth and adult outcomes. We then discuss the implications of this result for using season of birth as an instrumental variable; our findings suggest that, though popular, season-of-birth instruments may produce inconsistent estimates. Finally, we find that some of the seasonality in maternal characteristics is due to summer weather differentially affecting fertility patterns across socioeconomic groups.
107 citations
TL;DR: The evidence on the economic impact of and demand for more graduates is ambiguous and contradictory as discussed by the authors, and it is doubtful whether higher education is an effective or efficient means of meeting such demand.
Abstract: The British government's policy towards expanding higher education is based on two beliefs—that it is necessary for an improvement of economic performance, and that it can increase access to better jobs by those from lower socio-economic backgrounds. This article examines these two beliefs. The evidence on the economic impact of and demand for more graduates is ambiguous and contradictory. Meanwhile, the rest of the vocational and education system is likely to suffer damage as a consequence of the expansion of higher education, which is important in an economy where there remain many jobs with educational requirements below degree level. It is doubtful whether higher education is an effective or efficient means of meeting such demand. Given the present social-class composition of higher-education entry, there is a danger that further expansion, unless accompanied by a fundamental redistribution of access opportunities, will lead to a decline in social mobility. At the same time, the range of labour-market opportunities for those without degrees may get worse.
107 citations
TL;DR: The results suggest that completing high school improves health, as measured through self-reported health, chronic conditions, and exercise behavior, but that additional schooling does not lead to additional health gains.
Abstract: This paper estimates the health returns to schooling, using a twin design. For this purpose, I use data on monozygotic twins from the Midlife in the United States survey. The results suggest that completing high school improves health, as measured through self-reported health, chronic conditions, and exercise behavior, but that additional schooling does not lead to additional health gains. Controlling for certain early life factors that may vary within twin pairs does not alter the main conclusions of this paper.
107 citations