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The Co-twin Methodology and Returns to Schooling – Testing a Critical Assumption

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  • Sandewall, Örjan

    ()
    (London School of Economics)

  • Cesarini, David

    ()
    (Department of Economics)

  • Johannesson, Magnus

    (Department of Economics)

Abstract

Twins-based estimates of the return to schooling feature prominently in the labor economics literature. The validity of such estimates hinges critically on the assumption that within-pair variation in schooling is explained by factors which are unrelated to wage earning ability. This paper develops a framework for testing this assumption, and finds, using a unique dataset of monozygotic twins, strong evidence against it. Di¤erences in adolescent IQ test scores predict within-pair variation in educational attainment, and including IQ in the wage equation causes within-pair point estimates for the returns to schooling to decline significantly. Our results thus cast doubt on the validity of estimates derived from the co-twin literature.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 806.

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Length: 37 pages
Date of creation: 24 Aug 2009
Date of revision:
Handle: RePEc:hhs:iuiwop:0806

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Keywords: Returns to Schooling; Twins; Equal Ability Assumption;

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References

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  7. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Twins as an economic model
    by Kevin Denny in Geary Behaviour Centre on 2009-09-02 07:19:00
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Cited by:
  1. Gerdtham, Ulf-G & Lundborg, Petter & Lyttkens, Carl Hampus & Nystedt, Paul, 2012. "Do Socioeconomic Factors Really Explain Income-Related Inequalities in Health? Applying a Twin Design to Standard Decomposition Analysis," Working Papers 2012:21, Lund University, Department of Economics.
  2. Lundborg, Petter & Nilsson, Anton & Rooth, Dan-Olof, 2011. "Does Early Life Health Predict Schooling Within Twin Pairs?," IZA Discussion Papers 5803, Institute for the Study of Labor (IZA).
  3. Lundborg, Petter & Nordin, Martin & Rooth, Dan Olof, 2012. "The Intergenerational Transmission of Human Capital. The Role of Skills and Health," Working Papers 2012:22, Lund University, Department of Economics.
  4. Vikesh Amin & Jere Behrman, 2014. "Do more-schooled women have fewer children and delay childbearing? Evidence from a sample of US twins," Journal of Population Economics, Springer, vol. 27(1), pages 1-31, January.
  5. Rachel Berner Shalem & Francesca Cornaglia & Jan-Emmanuel De Neve, 2012. "The enduring impact of childhood experience on mental health: evidence using instrumented co-twin data," LSE Research Online Documents on Economics 51522, London School of Economics and Political Science, LSE Library.
  6. Lundborg, Petter & Nordin, Martin & Rooth, Dan-Olof, 2011. "The Intergenerational Transmission of Human Capital: Exploring the Role of Skills and Health Using Data on Adoptees and Twins," IZA Discussion Papers 6099, Institute for the Study of Labor (IZA).

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