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Estimates of the Returns to Schooling From Sibling Data: Fathers, Sons and Brothers

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  • Orley Ashenfelter
  • David J. Zimmerman

Abstract

In this paper we use data on brothers, and fathers and sons, to estimate the economic returns to schooling. Our goal is to determine whether the correlation between earnings and schooling is due, in part, to the correlation between family backgrounds and schooling. The basic idea is to contrast the differences between the schooling of brothers, and fathers and sons, with the differences in their respective earnings. Since individuals linked by family affiliation are more likely to have similar innate ability and family backgrounds than randomly selected individuals our procedure provides a straightforward control for unobserved family attributes. Our empirical results indicate that in the sample of brothers the ordinary least squares estimates of the return to schooling may be biased upward by some 25% by the omission of family background factors. Adjustments for measurement error, however, imply that the intrafamily estimate of the returns to schooling is biased downward by about 25% also, so that the ordinary least squares estimate suffers from very little overall bias. Using data on fathers and sons introduces some ambiguity into these findings, as commonly used specification tests reject our simplest models of the role of family background in the determination of earnings.

Suggested Citation

  • Orley Ashenfelter & David J. Zimmerman, 1993. "Estimates of the Returns to Schooling From Sibling Data: Fathers, Sons and Brothers," NBER Working Papers 4491, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:4491
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    References listed on IDEAS

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    1. Michael A. Boozer & Alan B. Kreuger & Shari Wolkon, 1992. "Race and School Quality Since Brown v. Board of Education," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1992 Micr), pages 269-338.
    2. repec:fth:prinin:304 is not listed on IDEAS
    3. Chamberlain, Gary, 1982. "Multivariate regression models for panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 5-46, January.
    4. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, vol. 84(5), pages 1157-1173, December.
    5. Griliches, Zvi, 1979. "Sibling Models and Data in Economics: Beginnings of a Survey," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 37-64, October.
    6. Blackburn, McKinley L & Neumark, David, 1993. "Omitted-Ability Bias and the Increase in the Return to Schooling," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 521-544, July.
    7. Orley Ashenfelter & Alan Krueger, 1992. "Estimates of the Economic Return to Schooling from a New Sample of Twins," Working Papers 683, Princeton University, Department of Economics, Industrial Relations Section..
    8. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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