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Misreported schooling and returns to education: evidence from the UK

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Author Info

  • Erich Battistin

    ()
    (Institute for Fiscal Studies)

  • Barbara Sianesi

    ()
    (Institute for Fiscal Studies)

Abstract

In this paper we study the impact of misreported treatment status on the estimation of causal treatment effects. We characterise the bias introduced by misclassification on the average treatment effect on the treated under the assumption of selection on observables. Although the bias of matching-type estimators computed from misclassified data cannot in general be signed, we show that the bias is most likely to be downward if misclassification does not depend on variables entering the selection-on-observables assumption, or only depends on such variables via the propensity score index. We extend the framework to multiple treatments. We provide results to bound the returns to a number of educational qualifications in the UK semi-parametrically, and by using the unique nature of our data we assess the plausibility for the two biases from measurement error and from omitted variables to cancel out.

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File URL: http://cemmap.ifs.org.uk/wps/cwp0607.pdf
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Bibliographic Info

Paper provided by Centre for Microdata Methods and Practice, Institute for Fiscal Studies in its series CeMMAP working papers with number CWP07/06.

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Length: 51 pp.
Date of creation: Apr 2006
Date of revision:
Handle: RePEc:ifs:cemmap:07/06

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Related research

Keywords: Measurement Error; Misclassification; Programme Evaluation; Returns to Educational Qualifications; Treatment Effect; Bounds;

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References

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  1. Molinari, Francesca, 2008. "Partial identification of probability distributions with misclassified data," Journal of Econometrics, Elsevier, vol. 144(1), pages 81-117, May.
  2. Guido W. Imbens & Charles F. Manski, 2004. "Confidence Intervals for Partially Identified Parameters," Econometrica, Econometric Society, vol. 72(6), pages 1845-1857, November.
  3. Arnaud Chevalier & Colm Harmon & Ian Walker & Yu Zhu, 2003. "Does education raise productivity, or just reflect it?," Working Papers 200304, School Of Economics, University College Dublin.
  4. Jo Blanden & Alissa Goodman & Paul Gregg & Stephen Machin, 2002. "Changes in intergenerational mobility in Britain," LSE Research Online Documents on Economics 19507, London School of Economics and Political Science, LSE Library.
  5. Dearden, Lorraine, et al, 2002. "The Returns to Academic and Vocational Qualifications in Britain," Bulletin of Economic Research, Wiley Blackwell, vol. 54(3), pages 249-74, July.
  6. Steven Mcintosh, 2006. "Further Analysis of the Returns to Academic and Vocational Qualifications," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(2), pages 225-251, 04.
  7. Lorraine Dearden, 1999. "Qualifications and earnings in Britain: how reliable are conventional OLS estimates of the returns to education?," IFS Working Papers W99/07, Institute for Fiscal Studies.
  8. Battistin, Erich & De Nadai, Michele & Sianesi, Barbara, 2012. "Misreported Schooling, Multiple Measures and Returns to Educational Qualifications," IZA Discussion Papers 6337, Institute for the Study of Labor (IZA).
  9. Peter Robinson, 1997. "The Myth of Parity of Esteem: Earnings and Qualifications," CEP Discussion Papers dp0354, Centre for Economic Performance, LSE.
  10. Dearden, Lorraine, 1999. "The effects of families and ability on men's education and earnings in Britain1," Labour Economics, Elsevier, vol. 6(4), pages 551-567, November.
  11. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
  12. Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001. "Measurement error in survey data," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843 Elsevier.
  13. Arthur Lewbel, 2007. "Estimation of Average Treatment Effects with Misclassification," Econometrica, Econometric Society, vol. 75(2), pages 537-551, 03.
  14. Blundell, Richard, et al, 2000. "The Returns to Higher Education in Britain: Evidence from a British Cohort," Economic Journal, Royal Economic Society, vol. 110(461), pages F82-99, February.
  15. Aigner, Dennis J., 1973. "Regression with a binary independent variable subject to errors of observation," Journal of Econometrics, Elsevier, vol. 1(1), pages 49-59, March.
  16. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
  17. Del Bono, Emilia & Galindo-Rueda, Fernando, 2004. "Do a Few Months of Compulsory Schooling Matter? The Education and Labour Market Impact of School Leaving Rules," IZA Discussion Papers 1233, Institute for the Study of Labor (IZA).
  18. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
  19. Richard Blundell & Lorraine Dearden & Barbara Sianesi, 2004. "Evaluating the Impact of Education on Earnings in the UK: Models, Methods and Results from the NCDS," CEE Discussion Papers 0047, Centre for the Economics of Education, LSE.
  20. Card, David, 1996. "The Effect of Unions on the Structure of Wages: A Longitudinal Analysis," Econometrica, Econometric Society, vol. 64(4), pages 957-79, July.
  21. Black, Dan & Sanders, Seth & Taylor, Lowell, 2003. "Measurement of Higher Education in the Census and Current Population Survey," Journal of the American Statistical Association, American Statistical Association, vol. 98, pages 545-554, January.
  22. Galindo-Rueda, Fernando & Vignoles, Anna, 2002. "Class Ridden or Meritocratic? An Economic Analysis of Recent Changes in Britain," IZA Discussion Papers 677, Institute for the Study of Labor (IZA).
  23. Rajeev H. Dehejia & Sadek Wahba, 1998. "Causal Effects in Non-Experimental Studies: Re-Evaluating the Evaluation of Training Programs," NBER Working Papers 6586, National Bureau of Economic Research, Inc.
  24. Bollinger, Christopher R., 1996. "Bounding mean regressions when a binary regressor is mismeasured," Journal of Econometrics, Elsevier, vol. 73(2), pages 387-399, August.
  25. Aprajit Mahajan, 2006. "Identification and Estimation of Regression Models with Misclassification," Econometrica, Econometric Society, vol. 74(3), pages 631-665, 05.
  26. Horowitz, Joel & Manski, Charles, 1997. "Nonparametric Analysis of Randomized Experiments With Missing Covariate and Outcome Data," Working Papers 97-16, University of Iowa, Department of Economics.
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Citations

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Cited by:
  1. Anna Vignoles & Augustin de Coulon, 2008. "An Analysis of the Benefit of NVQ2 Qualifications Acquired at Age 26-34," CEE Discussion Papers 0106, Centre for the Economics of Education, LSE.
  2. Kristensen, Nicolai & WestergĂĄrd-Nielsen, Niels C., 2006. "A Large-Scale Validation Study of Measurement Errors in Longitudinal Survey Data," IZA Discussion Papers 2329, Institute for the Study of Labor (IZA).
  3. Joop Hartog & Aslan Zorlu, 2009. "How important is homeland education for refugees’ economic position in The Netherlands?," Journal of Population Economics, Springer, vol. 22(1), pages 219-246, January.
  4. Yingying Dong, 2012. "Regression Discontinuity Applications with Rounding Errors in the Running Variable," Working Papers 111206, University of California-Irvine, Department of Economics.
  5. Erich Battistin & Enrico Rettore & Ugo Trivellato, 2005. "Choosing among alternative classification criteria to measure the labour force state," IFS Working Papers W05/18, Institute for Fiscal Studies.

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