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The Effect Of Education On Cognitive Ability

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  • TORBERG FALCH
  • SOFIA SANDGREN MASSIH

Abstract

We analyze whether the amount of schooling influences intelligence as measured by IQ tests. By use of a novel longitudinal dataset we are able to condition on early cognitive ability to account for selection into non-compulsory schooling when estimating the effect on cognitive ability at age 20. OLS estimates indicate that one year of schooling increases IQ by 2.8-3.5 points (about 0.2 standard deviations). When family income per family member and teacher evaluations of the individuals at age 10 are used as instruments for schooling and early cognitive ability, the return to schooling is estimated to 3.5-3.8 IQ points.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 49 (2011)
Issue (Month): 3 (07)
Pages: 838-856

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Handle: RePEc:bla:ecinqu:v:49:y:2011:i:3:p:838-856

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References

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  1. Mårten Palme & Sofia Sandgren, 2008. "Parental Income, Lifetime Income, and Mortality," Journal of the European Economic Association, MIT Press, MIT Press, vol. 6(4), pages 890-911, 06.
  2. Cunha, Flavio & Heckman, James J. & Lochner, Lance John & Masterov, Dimitriy V., 2005. "Interpreting the Evidence on Life Cycle Skill Formation," IZA Discussion Papers 1675, Institute for the Study of Labor (IZA).
  3. Falch , Torberg & Sandgren Massih, Sofia, 2010. "The effect of early cognitive ability on earnings over the life-cycle," Working Paper Series, Center for Labor Studies, Uppsala University, Department of Economics 2010:2, Uppsala University, Department of Economics.
  4. Jörn-Steffen Pischke & Till von Wachter, 2006. "Zero Returns to Compulsory Schooling in Germany: Evidence and Interpretation," CEE Discussion Papers, Centre for the Economics of Education, LSE 0054, Centre for the Economics of Education, LSE.
  5. Karsten Hansen & James J. Heckman & Kathleen J. Mullen, 2003. "The Effect of Schooling and Ability on Achievement Test Scores," NBER Working Papers 9881, National Bureau of Economic Research, Inc.
  6. Heckman, James J., 2000. "Policies to foster human capital," Research in Economics, Elsevier, Elsevier, vol. 54(1), pages 3-56, March.
  7. James Heckman & Edward Vytlacil, 2001. "Identifying The Role Of Cognitive Ability In Explaining The Level Of And Change In The Return To Schooling," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 1-12, February.
  8. Joseph G. Altonji & Charles R. Pierret, 1997. "Employer learning and statistical discrimination," Working Paper Series, Macroeconomic Issues, Federal Reserve Bank of Chicago WP-97-11, Federal Reserve Bank of Chicago.
  9. Joshua D. Angrist & Alan B. Krueger, 1990. "Does Compulsory School Attendance Affect Schooling and Earnings?," NBER Working Papers 3572, National Bureau of Economic Research, Inc.
  10. Blackburn, McKinley L & Neumark, David, 1993. "Omitted-Ability Bias and the Increase in the Return to Schooling," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 11(3), pages 521-44, July.
  11. Costas Meghir & Mårten Palme, 2004. "Educational reform, ability and family background," IFS Working Papers, Institute for Fiscal Studies W04/10, Institute for Fiscal Studies.
  12. Petra E. Todd & Kenneth I. Wolpin, 2003. "On The Specification and Estimation of The Production Function for Cognitive Achievement," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 113(485), pages F3-F33, February.
  13. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, Econometric Society, vol. 45(1), pages 1-22, January.
  14. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
  15. Eric A. Hanushek & John F. Kain & Steven G. Rivkin, 1998. "Teachers, Schools, and Academic Achievement," NBER Working Papers 6691, National Bureau of Economic Research, Inc.
  16. Eric A. Hanushek, 1979. "Conceptual and Empirical Issues in the Estimation of Educational Production Functions," Journal of Human Resources, University of Wisconsin Press, vol. 14(3), pages 351-388.
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Cited by:
  1. Schneeweis, Nicole & Skirbekk, Vegard & Winter-Ebmer, Rudolf, 2012. "Does Schooling Improve Cognitive Functioning at Older Ages?," Economics Series, Institute for Advanced Studies 293, Institute for Advanced Studies.
  2. Daniel A. Kamhöfer & Hendrik Schmitz, 2013. "Analyzing Zero Returns to Education in Germany: Heterogeneous Effects and Skill Formation," SOEPpapers on Multidisciplinary Panel Data Research 598, DIW Berlin, The German Socio-Economic Panel (SOEP).
  3. Mohammad Niaz Asadullah, Nazmul Chaudhury, 2013. "Primary Schooling, Student Learning, and School Quality in Rural Bangladesh-Working Paper 349," Working Papers, Center for Global Development 349, Center for Global Development.
  4. Silke Anger & Guido Heineck, 2009. "Do Smart Parents Raise Smart Children?: The Intergenerational Transmission of Cognitive Abilities," SOEPpapers on Multidisciplinary Panel Data Research 156, DIW Berlin, The German Socio-Economic Panel (SOEP).
  5. Nicole Schneeweis & Vegard Skirbekk & Rudolf Winter-Ebmer, 2014. "Does Education Improve Cognitive Performance Four Decades After School Completion?," Demography, Springer, Springer, vol. 51(2), pages 619-643, April.
  6. Daniele, Vittorio, 2013. "Does the intelligence of populations determine the wealth of nations?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, Elsevier, vol. 46(C), pages 27-37.
  7. Bingley, Paul & Martinello, Alessandro, 2013. "Mental retirement and schooling," European Economic Review, Elsevier, Elsevier, vol. 63(C), pages 292-298.

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