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The Effect of Schooling and Ability on Achievement Test Scores

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Author Info

  • Hansen, Karsten T.

    ()
    (Northwestern University)

  • Heckman, James J.

    ()
    (University of Chicago)

  • Mullen, Kathleen

    ()
    (RAND)

Abstract

This paper develops two methods for estimating the effect of schooling on achievement test scores that control for the 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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 826.

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Length: 71 pages
Date of creation: Jul 2003
Date of revision:
Publication status: published in: Journal of Econometrics, 2004, 121 (1-2), 39-98
Handle: RePEc:iza:izadps:dp826

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

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  1. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, Elsevier, vol. 30(1-2), pages 239-267.
  2. Pedro Carneiro & Karsten T. Hansen & James J. Heckman, 2003. "Estimating Distributions of Treatment Effects with an Application to the Returns to Schooling and Measurement of the Effects of Uncertainty on College," NBER Working Papers, National Bureau of Economic Research, Inc 9546, National Bureau of Economic Research, Inc.
  3. Carneiro, Pedro & Hansen, Karsten & Heckman, James, 2003. "Estimating distributions of treatment effects with an application to the returns to schooling and measurement of the effects of uncertainty on college choice," Working Paper Series, IFAU - Institute for Evaluation of Labour Market and Education Policy 2003:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  4. James Heckman & Edward Vytlacil, 2001. "Identifying The Role Of Cognitive Ability In Explaining The Level Of And Change In The Return To Schooling," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 83(1), pages 1-12, February.
  5. Heckman, James J, 1974. "Effects of Child-Care Programs on Women's Work Effort," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(2), pages S136-S163, Part II, .
  6. Thompson, T.S., 1989. "Identification Of Semiparametric Discrete Choice Models," Papers, Minnesota - Center for Economic Research 249, Minnesota - Center for Economic Research.
  7. Yona Rubinstein & James J. Heckman, 2001. "The Importance of Noncognitive Skills: Lessons from the GED Testing Program," American Economic Review, American Economic Association, American Economic Association, vol. 91(2), pages 145-149, May.
  8. James J. Heckrnan, 1974. "Effects of Child-Care Programs on Women's Work Effort," NBER Chapters, National Bureau of Economic Research, Inc, in: Economics of the Family: Marriage, Children, and Human Capital, pages 491-524 National Bureau of Economic Research, Inc.
  9. Ariel Pakes & Steven Olley, 1994. "A Limit Theorem for a Smooth Class of Semiparametric Estimators," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1066, Cowles Foundation for Research in Economics, Yale University.
  10. Alan Krueger & Orley Ashenfelter, 1992. "Estimates of the Economic Return to Schooling from a New Sample of Twins," NBER Working Papers, National Bureau of Economic Research, Inc 4143, National Bureau of Economic Research, Inc.
  11. McFadden, Daniel L., 1984. "Econometric analysis of qualitative response models," Handbook of Econometrics, Elsevier, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 24, pages 1395-1457 Elsevier.
  12. Heckman, James J & Honore, Bo E, 1990. "The Empirical Content of the Roy Model," Econometrica, Econometric Society, Econometric Society, vol. 58(5), pages 1121-49, September.
  13. Joseph G. Altonji & Charles R. Pierret, 1997. "Employer Learning and Statistical Discrimination," NBER Working Papers, National Bureau of Economic Research, Inc 6279, National Bureau of Economic Research, Inc.
  14. G. Steven Olley & Ariel Pakes, 1992. "The Dynamics of Productivity in the Telecommunications Equipment Industry," NBER Working Papers, National Bureau of Economic Research, Inc 3977, National Bureau of Economic Research, Inc.
  15. 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, University of Chicago Press, vol. 106(2), pages 262-333, April.
  16. McCulloch, Robert & Rossi, Peter E., 1994. "An exact likelihood analysis of the multinomial probit model," Journal of Econometrics, Elsevier, Elsevier, vol. 64(1-2), pages 207-240.
  17. Cameron, Stephen V & Heckman, James J, 1993. "The Nonequivalence of High School Equivalents," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 11(1), pages 1-47, January.
  18. Neal, Derek A & Johnson, William R, 1996. "The Role of Premarket Factors in Black-White Wage Differences," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 104(5), pages 869-95, October.
  19. Matzkin, Rosa L., 1993. "Nonparametric identification and estimation of polychotomous choice models," Journal of Econometrics, Elsevier, Elsevier, vol. 58(1-2), pages 137-168, July.
  20. Hanushek, Eric A., 2002. "Publicly provided education," Handbook of Public Economics, Elsevier, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 30, pages 2045-2141 Elsevier.
  21. Stephen V. Cameron & James J. Heckman, 2001. "The Dynamics of Educational Attainment for Black, Hispanic, and White Males," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 109(3), pages 455-499, June.
  22. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, Econometric Society, vol. 42(4), pages 679-94, July.
  23. 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, Department of Economics, University of Bergen 0599, Department of Economics, University of Bergen.
  24. Sylvia Richardson & Laurent Leblond & Isabelle Jaussent & Peter J. Green, 2002. "Mixture models in measurement error problems, with reference to epidemiological studies," Journal of the Royal Statistical Society Series A, Royal Statistical Society, Royal Statistical Society, vol. 165(3), pages 549-566.
  25. Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts," NBER Working Papers, National Bureau of Economic Research, Inc 6385, National Bureau of Economic Research, Inc.
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