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The effects of educational choices on labor market, health, and social outcomes

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Author Info

  • James J. Heckman

    ()
    (University of Chicago, Department of Economics)

  • John Eric Humphries

    (University of Chicago, Department of Economics)

  • Sergio Urzua

    (University of Maryland, Department of Economics)

  • Gregory Veramendi

    (Aarhus University, School of Economics and Management)

Abstract

Using a sequential model of educational choices, we investigate the effect of educational choices on labor market, health, and social outcomes. Unobserved endowments drive the correlations in unobservables across choice and outcome equations. We proxy these endowments with numerous measurements and account for measurement error in the proxies. For each schooling level, we estimate outcomes for labor market, health, and social outcome. This allows us to generate counter-factual outcomes for dynamic choices and a variety of policy and treatment effects. In our framework, responses to treatment vary among observationally identical persons and agents may select into the treatment on the basis of their responses. We find important effects of early cognitive and socio-emotional abilities on schooling choices, labor market outcomes, adult health, and social outcomes. Education at most levels causally produces gains on labor market, health, and social outcomes. We estimate the distribution of responses to education and find substantial heterogeneity on which agents act.

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File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/HHUV_2010_effect-edu-choice.pdf
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Bibliographic Info

Paper provided by Human Capital and Economic Opportunity Working Group in its series Working Papers with number 2011-002.

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Date of creation: 2010
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Handle: RePEc:hka:wpaper:2011-002

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References

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  1. Heckman, James J. & Navarro, Salvador, 2005. "Dynamic Discrete Choice and Dynamic Treatment Effects," IZA Discussion Papers 1790, Institute for the Study of Labor (IZA).
  2. John Cawley & Karen Conneely & James Heckman & Edward Vytlacil, 1996. "Cognitive Ability, Wages, and Meritocracy," NBER Working Papers 5645, National Bureau of Economic Research, Inc.
  3. Checchi,Daniele, 2006. "The Economics of Education," Cambridge Books, Cambridge University Press, number 9780521793100, October.
  4. Robert Kaestner, 2009. "Adolescent Cognitive and Non-cognitive Correlates of Adult Health," NBER Working Papers 14924, National Bureau of Economic Research, Inc.
  5. Borghans Lex & Golsteyn Bart H.H. & Heckman James & Humphries John Eric, 2011. "Identification Problems in Personality Psychology," Research Memorandum 025, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  6. Coelli, Michael B. & Green, David A. & Warburton, William P., 2007. "Breaking the cycle? The effect of education on welfare receipt among children of welfare recipients," Journal of Public Economics, Elsevier, vol. 91(7-8), pages 1369-1398, August.
  7. Almlund, Mathilde & Duckworth, Angela Lee & Heckman, James J. & Kautz, Tim, 2011. "Personality Psychology and Economics," IZA Discussion Papers 5500, Institute for the Study of Labor (IZA).
  8. M. Christopher Auld & Nirmal Sidhu, 2004. "Schooling, cognitive ability, and health," HEW 0406001, EconWPA.
  9. Cutler, David M. & Lleras-Muney, Adriana, 2010. "Understanding differences in health behaviors by education," Journal of Health Economics, Elsevier, vol. 29(1), pages 1-28, January.
  10. Donald Kenkel & Dean Lillard & Alan Mathios, 2006. "The Roles of High School Completion and GED Receipt in Smoking and Obesity," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 635-660, July.
  11. Aakvik, Arild & Heckman, James J. & Vytlacil, Edward J., 2005. "Estimating treatment effects for discrete outcomes when responses to treatment vary: an application to Norwegian vocational rehabilitation programs," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 15-51.
  12. Keane, Michael P & Wolpin, Kenneth I, 1997. "The Career Decisions of Young Men," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 473-522, June.
  13. Milligan, Kevin & Moretti, Enrico & Oreopoulos, Philip, 2004. "Does education improve citizenship? Evidence from the United States and the United Kingdom," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1667-1695, August.
  14. Arendt, Jacob Nielsen, 2005. "Does education cause better health? A panel data analysis using school reforms for identification," Economics of Education Review, Elsevier, vol. 24(2), pages 149-160, April.
  15. Comay, Yochanan & Melnik, A & Pollatschek, M A, 1973. "The Option Value of Education and the Optimal Path for Investment in Human Capital," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(2), pages 421-35, June.
  16. Gabriella Conti & James Heckman & Sergio Urzua, 2010. "The Education-Health Gradient," American Economic Review, American Economic Association, vol. 100(2), pages 234-38, May.
  17. Silles, Mary A., 2009. "The causal effect of education on health: Evidence from the United Kingdom," Economics of Education Review, Elsevier, vol. 28(1), pages 122-128, February.
  18. Scott Adams, 2002. "Educational Attainment and Health: Evidence from a Sample of Older Adults," Education Economics, Taylor & Francis Journals, vol. 10(1), pages 97-109.
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Citations

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Cited by:
  1. James J. Heckman, 2011. "Integrating Personality Psychology into Economics," NBER Working Papers 17378, National Bureau of Economic Research, Inc.
  2. Ligia Alba Melo B. & Jorge Enrique Ramos F. & Pedro Oswaldo Hernández S., 2014. "La Educación Superior en Colombia: Situación Actual y Análisis de Eficiencia," Borradores de Economia 808, Banco de la Republica de Colombia.
  3. Calero, Carla & Corseuil, Carlos Henrique & Gonzales, Veronica & Kluve, Jochen & Soares, Yuri, 2014. "Can Arts-Based Interventions Enhance Labor Market Outcomes among Youth? Evidence from a Randomized Trial in Rio de Janeiro," IZA Discussion Papers 8210, Institute for the Study of Labor (IZA).
  4. Govert Bijwaard & Hans van Kippersluis & Justus Veenman, 2013. "Education and Health: The Role of Cognitive Ability," CESifo Working Paper Series 4207, CESifo Group Munich.
  5. James Heckman & Tim Kautz, 2013. "Fostering and Measuring Skills: Interventions That Improve Character and Cognition," Working Papers 2013-019, Human Capital and Economic Opportunity Working Group.
  6. Robert Lerman, 2013. "Are employability skills learned in U.S. youth education and training programs?," IZA Journal of Labor Policy, Springer, vol. 2(1), pages 1-20, December.
  7. Heckman, James J. & Mosso, Stefano, 2014. "The Economics of Human Development and Social Mobility," IZA Discussion Papers 8000, Institute for the Study of Labor (IZA).
  8. Belzil, Christian & Hansen, Jörgen & Liu, Xingfei, 2011. "Dynamic Skill Accumulation, Comparative Advantages, Compulsory Schooling, and Earnings," IZA Discussion Papers 6167, Institute for the Study of Labor (IZA).
  9. Peter Hoeschler & Uschi Backes-Gellner, 2014. "College Dropout and Self-Esteem," Economics of Education Working Paper Series 0100, University of Zurich, Institute for Strategy and Business Economics (ISU).
  10. Mai Seki, 2013. "Heterogeneous Returns to U.S. College Selectivity and the Value of Graduate Degree Attainment," Working Papers 13-46, Bank of Canada.
  11. Loreto Reyes & Jorge Rodríguez & Sergio S. Urzúa, 2013. "Heterogeneous Economic Returns to Postsecondary Degrees: Evidence from Chile," NBER Working Papers 18817, National Bureau of Economic Research, Inc.
  12. Audrey Light & Yoshiaki Omori, 2012. "Can Long-Term Cohabiting and Marital Unions be Incentivized?," Working Papers 12-01, Ohio State University, Department of Economics.

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