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The effect of schooling and ability on achievement test scores

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Author Info

  • Hansen, Karsten T

    ()
    (Kellogg School of Management, Northwestern University)

  • Heckman, James J

    (Department of Economics, The University of Chicago)

  • Mullen, Kathleen J

    ()
    (Department of Economics, The University of Chicago)

Abstract

This paper develops two methods for estimating the effect of schooling on achievement test scores that control for endogeneity of schooling by postulating that both schooling and test scores are generated by a common unobserved latent ability. These methods are applied to data on schooling and test scores. Estimates from the two methods are in close agreement. We find that the effects of schooling on test scores are roughly linear across schooling levels. The effects of schooling on measured test scores are slightly larger for lower latent ability levels. We find that schooling increases the AFQT score on average between 2 and 4 percentage points, roughly twice as large as the effect claimed by Herrnstein and Murray (1994) but in agreement with estimates produced by Neal and Johnson (1996) and Winship and Korenman (1997). We extend the previous literature by estimating the impact of schooling on measured test scores at various quantiles of the latent ability distribution.

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Bibliographic Info

Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2003:13.

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Length: 71 pages
Date of creation: 15 May 2003
Date of revision:
Publication status: Published in Journal of Econometrics, 2004, pages 39-98.
Handle: RePEc:hhs:ifauwp:2003_013

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Keywords: Education; ability; latent variables; selection; MCMC;

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  3. Aakvik, A. & Heckman, J.J. & Vytlacil, E.J., 1999. "Training Effects on Employment when the Training Effects are Heterogenous : an Application to Norwegian Vocational Rehabilitation Programs," Norway; Department of Economics, University of Bergen 0599, Department of Economics, University of Bergen.
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  9. Hanushek, Eric A., 2002. "Publicly provided education," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 30, pages 2045-2141 Elsevier.
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  15. Matzkin, Rosa L., 1993. "Nonparametric identification and estimation of polychotomous choice models," Journal of Econometrics, Elsevier, vol. 58(1-2), pages 137-168, July.
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  21. McCulloch, Robert & Rossi, Peter E., 1994. "An exact likelihood analysis of the multinomial probit model," Journal of Econometrics, Elsevier, vol. 64(1-2), pages 207-240.
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