Estimating the Return to Endogenous Schooling Decisions via Conditional Second Moments
This paper employs conditional second moments to identify the impact of education in wage regressions where education is treated as endogenous. This approach avoids the use of instrumental variables in a setting where instruments are frequently not available. We employ this methodology to estimate the returns to schooling for a sample of Australian workers. We find that accounting for the endogeneity of education in this manner increases the estimated return to education from 6 percent to 10 percent.
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- Joshua D. Angrist & Alan B. Krueger, 1990.
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NBER Working Papers
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Elsevier, vol. 27(2), pages 149-160, April.
- Andrew Leigh & Chris Ryan, 2005. "Estimating Returns to Education: Three Natural Experiment Techniques Compared," CEPR Discussion Papers 493, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- Rummery, Sarah & Vella, Francis & Verbeek, Marno, 1999. "Estimating the returns to education for Australian youth via rank-order instrumental variables," Labour Economics, Elsevier, vol. 6(4), pages 491-507, November.
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