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The Nonmarket Benefits of Education and Ability

Author

Listed:
  • James J. Heckman
  • John Eric Humphries
  • Gregory Veramendi

Abstract

This paper analyzes the nonmarket benefits of education and ability. Using a dynamic model of educational choice, we estimate returns to education that account for selection bias and sorting on gains. We investigate a range of nonmarket outcomes, including incarceration, mental health, voter participation, trust, and participation in welfare. We find distinct patterns of returns that depend on the levels of schooling and ability. Unlike the monetary benefits of education, the benefits to education for many nonmarket outcomes are greater for low-ability persons. College graduation decreases welfare use, lowers depression, and raises self-esteem more for less-able individuals.

Suggested Citation

  • James J. Heckman & John Eric Humphries & Gregory Veramendi, 2018. "The Nonmarket Benefits of Education and Ability," Journal of Human Capital, University of Chicago Press, vol. 12(2), pages 282-304.
    • Handle: RePEc:ucp:jhucap:doi:10.1086/697535
    DOI: 10.1086/697535
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    1. Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), 2011. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 4, number 4, June.
    2. Pedro Carneiro & James J. Heckman & Edward J. Vytlacil, 2011. "Estimating Marginal Returns to Education," American Economic Review, American Economic Association, vol. 101(6), pages 2754-2781, October.
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    8. Heckman, James J. & Lochner, Lance J. & Todd, Petra E., 2006. "Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 1, chapter 7, pages 307-458, Elsevier.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • D10 - Microeconomics - - Household Behavior - - - General

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