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Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools

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  • Joseph G. Altonji
  • Todd E. Elder
  • Christopher R. Taber

Abstract

We develop estimation methods that use the amount of selection on the observables in a model as a guide to the amount of selection on the unobservables. We show that if the observed variables are a random subset of a large number of factors that influence the endogenous variable and the outcome of interest, then the relationship between the index of observables that determines the endogenous variable and the index that determines the outcome will be the same as the relationship between the indices of unobservables that determine the two variables. In some circumstances this fact may be used to identify the effect of the endogenous variable. We also propose an informal way to assess selectivity bias based on measuring the ratio of selection on unobservables to selection on observables that would be required if one is to attribute the entire effect of the endogenous variable to selection bias. We use our methods to estimate the effect of attending a Catholic high school on a variety of outcomes. Our main conclusion is that Catholic high schools substantially increase the probability of graduating from high school and, more tentatively, college attendance. We do not find much evidence for an effect on test scores.

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File URL: http://www.jstor.org/stable/full/10.1086/426036
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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 113 (2005)
Issue (Month): 1 (February)
Pages: 151-184

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Handle: RePEc:ucp:jpolec:v:113:y:2005:i:1:p:151-184

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Web page: http://www.journals.uchicago.edu/JPE/

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  1. Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts of American Males," Journal of Political Economy, University of Chicago Press, vol. 106(2), pages 262-333, April.
  2. Christopher Jepsen, 2003. "The Effectiveness of Catholic Primary Schooling," Journal of Human Resources, University of Wisconsin Press, vol. 38(4).
  3. Currie, J. & Thomas, D., 1995. "Does Head Start make a Difference?," Papers 95-10, RAND - Reprint Series.
  4. Eric M. Engen & William G. Gale & John Karl Scholz, 1996. "The Illusory Effects of Saving Incentives on Saving," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 113-138, Fall.
  5. Poterba, James M & Venti, Steven F & Wise, David A, 1994. "Targeted Retirement Saving and the Net Worth of Elderly Americans," American Economic Review, American Economic Association, vol. 84(2), pages 180-85, May.
  6. Bronars, Stephen G & Grogger, Jeff, 1994. "The Economic Consequences of Unwed Motherhood: Using Twin Births as a Natural Experiment," American Economic Review, American Economic Association, vol. 84(5), pages 1141-56, December.
  7. repec:eme:rlepps:v:18:y:1999:i:1999:p:115-140 is not listed on IDEAS
  8. Derek Neal, 1998. "What have we learned about the benefits of private schooling?," Economic Policy Review, Federal Reserve Bank of New York, issue Mar, pages 79-86.
  9. Witte, John F., 1992. "Private school versus public school achievement: Are there findings that should affect the educational choice debate?," Economics of Education Review, Elsevier, vol. 11(4), pages 371-394, December.
  10. Heckman, James J, 1990. "Varieties of Selection Bias," American Economic Review, American Economic Association, vol. 80(2), pages 313-18, May.
  11. Evans, William N & Schwab, Robert M, 1995. "Finishing High School and Starting College: Do Catholic Schools Make a Difference?," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 941-74, November.
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