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Compulsory Education and the Benefits of Schooling

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  • Melvin Stephens, Jr.
  • Dou-Yan Yang

Abstract

Causal estimates of the benefits of increased schooling using U.S. state schooling laws as instruments typically rely on specifications which assume common trends across states in the factors affecting different birth cohorts. Differential changes across states during this period, such as relative school quality improvements, suggest that this assumption may fail to hold. Across a number of outcomes including wages, unemployment, and divorce, we find that statistically significant causal estimates become insignificant and, in many instances, wrong-signed when allowing year of birth effects to vary across regions.

Suggested Citation

  • Melvin Stephens, Jr. & Dou-Yan Yang, 2013. "Compulsory Education and the Benefits of Schooling," NBER Working Papers 19369, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:19369
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    References listed on IDEAS

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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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