Journal Article
Estimates of the Economic Return to Schooling from a New Sample of Twins
Orley Ashenfelter and Alan Krueger
The American Economic Review
Vol. 84, No. 5 (Dec., 1994), pp. 1157-1173
Published
by: American Economic Association
https://www.jstor.org/stable/2117766
Page Count: 17
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Topics: Identical twins, Instrumental variables estimation, Wage rate, Siblings, Estimation bias, Error rates, Education, Estimators, Covariance matrices
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Abstract
This paper uses a new survey to contrast the wages of genetically identical twins with different schooling levels. Multiple measurements of schooling levels were also collected to assess the effect of reporting error on the estimated economic returns to schooling. The data indicate that omitted ability variables do not bias the estimated return to schooling upward, but that measurement error does bias it downward. Adjustment for measurement error indicates that an additional year of schooling increases wages by 12-16 percent, a higher estimate of the economic returns to schooling than has been previously found.
The American Economic Review © 1994 American Economic Association