Estimates of the Return to Schooling From Sibling Data: Fathers, Sons and Brothers
AbstractIn 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.
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Bibliographic InfoPaper provided by Princeton University, Department of Economics, Industrial Relations Section. in its series Working Papers with number 697.
Date of creation: Sep 1993
Date of revision:
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education; family background; measurement error; correlated random effects;
Other versions of this item:
- Orley Ashenfelter & David J. Zimmerman, 1997. "Estimates Of The Returns To Schooling From Sibling Data: Fathers, Sons, And Brothers," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 1-9, February.
- 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.
- C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
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"Omitted-Ability Bias and the Increase in the Return to Schooling,"
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- Alan Krueger & Orley Ashenfelter, 1992. "Estimates of the Economic Return to Schooling from a New Sample of Twins," NBER Working Papers 4143, National Bureau of Economic Research, Inc.
- repec:fth:prinin:304 is not listed on IDEAS
- Chamberlain, Gary, 1982. "Multivariate regression models for panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 5-46, January.
- 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 S37-64, October.
- Michael Boozer & Alan Krueger & Shari Wolkon, 1992.
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681, Princeton University, Department of Economics, Industrial Relations Section..
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