IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Instrument Choice and the Returns to Education: New Evidence from Vietnam

Listed author(s):
  • Jean-Louis ARCAND

    ()

  • Béatrice D'HOMBRES

    ()

    (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • Paul GYSELINCK

    ()

This paper focuses on instrument choice while consistently estimating the returns to education in Vietnam. Using data culled from the 2 rounds of the Vietnam Living Standards Survey (VLSS), we explore different sets of exogenous instruments that rely on demand and supply side sources of variation in schooling as well as the matrix of instruments proposed by Hausman and Taylor (1981). Instrument validity tests suggest that many variables do not satisfy the necessary conditions allowing them to be used as instruments. As in several studies, we find that IV estimates of the returns to education are substantially higher than the corresponding OLS estimate. We show how the Hausman-Taylor matrix of instruments, when combined with other instruments, may be a useful way of consistently estimating an average return to education rather than a local average treatment effect (Angrist, 1994).

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://publi.cerdi.org/ed/2004/2004.22.pdf
Download Restriction: no

Paper provided by CERDI in its series Working Papers with number 200422.

as
in new window

Length: 21
Date of creation: 2004
Handle: RePEc:cdi:wpaper:633
Contact details of provider: Postal:
65 Bd. F. Mitterrand, 63000 Clermont-Ferrand

Phone: (33-4) 73 17 74 00
Fax: (33-4) 73 17 74 28
Web page: http://cerdi.org/

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Margaret Maurer-Fazio & Ngan Dinh, 2004. "Differential rewards to, and contributions of, education in urban China's segmented labor markets," Pacific Economic Review, Wiley Blackwell, vol. 9(3), pages 173-189, October.
  2. Glewwe, Paul & Patrinos, Harry Anthony, 1999. "The Role of the Private Sector in Education in Vietnam: Evidence From the Vietnam Living Standards Survey," World Development, Elsevier, vol. 27(5), pages 887-902, May.
  3. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
  4. James Heckman & Edward Vytlacil, 1998. "Instrumental Variables Methods for the Correlated Random Coefficient Model: Estimating the Average Rate of Return to Schooling When the Return is Correlated with Schooling," Journal of Human Resources, University of Wisconsin Press, vol. 33(4), pages 974-987.
  5. -, 2000. "Evolución de la economía brasileña," Informe Estadístico – Oficina de la CEPAL en Brasilia 27987, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
  6. Jean H.P. Paelinck, 2000. "On aggregation in spatial econometric modelling," Journal of Geographical Systems, Springer, vol. 2(2), pages 157-165, 07.
  7. Buse, A, 1992. "The Bias of Instrumental Variable Estimators," Econometrica, Econometric Society, vol. 60(1), pages 173-180, January.
  8. Fersterer, Josef & Winter-Ebmer, Rudolf, 2003. "Smoking, discount rates, and returns to education," Economics of Education Review, Elsevier, vol. 22(6), pages 561-566, December.
  9. Donald, Stephen G & Newey, Whitney K, 2001. "Choosing the Number of Instruments," Econometrica, Econometric Society, vol. 69(5), pages 1161-1191, September.
  10. N/A, 2000. "The world economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 174(1), pages 3-3, October.
  11. Ichino, Andrea & Winter-Ebmer, Rudolf, 1999. "Lower and upper bounds of returns to schooling: An exercise in IV estimation with different instruments," European Economic Review, Elsevier, vol. 43(4-6), pages 889-901, April.
  12. Hausman, Jerry A & Taylor, William E, 1981. "Panel Data and Unobservable Individual Effects," Econometrica, Econometric Society, vol. 49(6), pages 1377-1398, November.
  13. Anonymous, 2000. "Microeconomic Reform and the Environment," Conference/Workshop Proceedings 31908, Productivity Commission.
  14. Nelson, Charles R & Startz, Richard, 1990. "Some Further Results on the Exact Small Sample Properties of the Instrumental Variable Estimator," Econometrica, Econometric Society, vol. 58(4), pages 967-976, July.
  15. anonymous, 2000. "Western economic developments," Western economic developments, Federal Reserve Bank of San Francisco, issue Jun.
  16. Costas Meghir & Mårten Palme, 1999. "Assessing the effect of schooling on earnings using a social experiment," IFS Working Papers W99/10, Institute for Fiscal Studies.
  17. Colm Harmon; & Ian Walker, 1995. "Estimates of Economic Return to Schooling in the UK," Economics, Finance and Accounting Department Working Paper Series n540195, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  18. -, 2000. "Evolución de la economía brasileña," Informe Estadístico – Oficina de la CEPAL en Brasilia 27992, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
  19. van de Walle, Dominique & Gunewardena, Dileni, 2001. "Sources of ethnic inequality in Viet Nam," Journal of Development Economics, Elsevier, vol. 65(1), pages 177-207, June.
  20. -, 2000. "Evolución de la economía brasileña," Informe Estadístico – Oficina de la CEPAL en Brasilia 27990, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
  21. N/A, 2000. "At a Glance ... The UK economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 173(1), pages 2-2, July.
  22. anonymous, 2000. "Western economic developments," Western economic developments, Federal Reserve Bank of San Francisco, issue Mar.
  23. Anonymous, 2000. "Agricultural Economics Volumes 1-22, 1986-2000," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 23(2), August.
  24. -, 2000. "Global economic developments, 1999," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 27471, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
  25. ., 2000. "Inflation and economic performance," Chapters,in: Macroeconomic Instability and Coordination, chapter 8 Edward Elgar Publishing.
  26. Minot, Nicholas & Baulch, Bob, 2002. "The spatial distribution of poverty in Vietnam and the potential for targeting," Policy Research Working Paper Series 2829, The World Bank.
  27. -, 2000. "Evolución de la economía brasileña," Informe Estadístico – Oficina de la CEPAL en Brasilia 27988, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
  28. Orley Ashenfelter & Cecilia Rouse, 1998. "Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins," The Quarterly Journal of Economics, Oxford University Press, vol. 113(1), pages 253-284.
  29. anonymous, 2000. "Western economic developments," Western economic developments, Federal Reserve Bank of San Francisco, issue Sep.
  30. -, 2000. "Evolución de la economía brasileña," Informe Estadístico – Oficina de la CEPAL en Brasilia 27984, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
  31. anonymous, 2000. "Western economic developments," Western economic developments, Federal Reserve Bank of San Francisco, issue Nov.
  32. anonymous, 2000. "Twelfth District economic update," Western economic developments, Federal Reserve Bank of San Francisco, issue Dec, pages 1-5.
  33. Joshua D. Angrist & Alan B. Keueger, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 979-1014.
  34. N/A, 2000. "Section I. Recent economic developments," National Institute Economic Review, National Institute of Economic and Social Research, vol. 174(1), pages 30-37, October.
  35. N/A, 2000. "The world economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 172(1), pages 3-3, April.
  36. Orazem, Peter F. & Vodopivec, Milan, 1997. "Value of human capital in transition to market: Evidence from Slovenia," European Economic Review, Elsevier, vol. 41(3-5), pages 893-903, April.
  37. Harmon, Colm & Walker, Ian, 1995. "Estimates of the Economic Return to Schooling for the United Kingdom," American Economic Review, American Economic Association, vol. 85(5), pages 1278-1286, December.
  38. 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.
  39. Callan, Tim & Harmon, Colm, 1999. "The economic return to schooling in Ireland," Labour Economics, Elsevier, vol. 6(4), pages 543-550, November.
  40. anonymous, 2000. "Reviewing economic development needs," Banking and Community Perspectives, Federal Reserve Bank of Dallas, issue 2, pages 6-7.
  41. -, 2000. "Economic survey of United States, 1999," Oficina de la CEPAL en Washington (Estudios e Investigaciones) 28796, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
  42. Marjolein C.J. Caniëls, 2000. "Knowledge Spillovers and Economic Growth," Books, Edward Elgar Publishing, number 1936, July.
  43. Dominique van de Walle, 2003. "Are Returns to Investment Lower for the Poor? Human and Physical Capital Interactions in Rural Vietnam," Review of Development Economics, Wiley Blackwell, vol. 7(4), pages 636-653, November.
  44. ., 2000. "Ideology and analysis in macroeconomics," Chapters,in: Macroeconomic Instability and Coordination, chapter 18 Edward Elgar Publishing.
  45. -, 2000. "Evolución de la economía brasileña," Informe Estadístico – Oficina de la CEPAL en Brasilia 27991, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
  46. N/A, 2000. "The world economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 173(1), pages 3-3, July.
  47. Ashenfelter, Orley & Harmon, Colm & Oosterbeek, Hessel, 1999. "A review of estimates of the schooling/earnings relationship, with tests for publication bias," Labour Economics, Elsevier, vol. 6(4), pages 453-470, November.
  48. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
  49. Falaris, Evangelos M., 2003. "The effect of survey attrition in longitudinal surveys: evidence from Peru, Cote d'Ivoire and Vietnam," Journal of Development Economics, Elsevier, vol. 70(1), pages 133-157, February.
  50. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
  51. Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-529, October.
  52. -, 2000. "Meeting held on engendering macroeconomic policy," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 2, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
  53. anonymous, 2000. "Strengthening the emerging market economies," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 44(Jun), pages 228-231.
  54. Harmon, Harmon & Ian Walker, 1995. "Estimates of the economic return to schooling for the UK," IFS Working Papers W95/12, Institute for Fiscal Studies.
  55. Bound, John & Solon, Gary, 1999. "Double trouble: on the value of twins-based estimation of the return to schooling," Economics of Education Review, Elsevier, vol. 18(2), pages 169-182, April.
  56. 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.
  57. -, 2000. "Economic survey of Canada, 1999," Oficina de la CEPAL en Washington (Estudios e Investigaciones) 28797, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
  58. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-1160, September.
  59. anonymous, 2000. "Western economic developments," Western economic developments, Federal Reserve Bank of San Francisco, issue May.
  60. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
  61. Dearden, Lorraine, 1999. "The effects of families and ability on men's education and earnings in Britain1," Labour Economics, Elsevier, vol. 6(4), pages 551-567, November.
  62. -, 2000. "Evolución de la economía brasileña," Informe Estadístico – Oficina de la CEPAL en Brasilia 27985, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
  63. Boissiere, M & Knight, J B & Sabot, R H, 1985. "Earnings, Schooling, Ability, and Cognitive Skills," American Economic Review, American Economic Association, vol. 75(5), pages 1016-1030, December.
  64. David Card, 1993. "Using Geographic Variation in College Proximity to Estimate the Return to Schooling," NBER Working Papers 4483, National Bureau of Economic Research, Inc.
  65. N/A, 2000. "The World Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 173(1), pages 43-65, July.
  66. Breusch, Trevor S & Mizon, Grayham E & Schmidt, Peter, 1989. "Efficient Estimation Using Panel Data," Econometrica, Econometric Society, vol. 57(3), pages 695-700, May.
  67. -, 2000. "Evolución de la economía brasileña," Informe Estadístico – Oficina de la CEPAL en Brasilia 27986, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
  68. -, 2000. "Evolución de la economía brasileña," Informe Estadístico – Oficina de la CEPAL en Brasilia 27983, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
  69. repec:ecr:col114:28022 is not listed on IDEAS
  70. anonymous, 2000. "Western economic developments," Western economic developments, Federal Reserve Bank of San Francisco, issue Aug.
  71. Behrman, Jere R & Rosenzweig, Mark R & Taubman, Paul, 1994. "Endowments and the Allocation of Schooling in the Family and in the Marriage Market: The Twins Experiment," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1131-1174, December.
  72. Moock, Peter R. & Patrinos, Harry Anthony & Venkataraman, Meera, 2003. "Education and earnings in a transition economy: the case of Vietnam," Economics of Education Review, Elsevier, vol. 22(5), pages 503-510, October.
  73. Yves Guillotin & Patrick Sevestre, 1994. "Estimations de fonctions de gains sur données de panel : endogéneité du capital humain et effets de la sélection," Économie et Prévision, Programme National Persée, vol. 116(5), pages 119-135.
  74. Amemiya, Takeshi & MaCurdy, Thomas E, 1986. "Instrumental-Variable Estimation of an Error-Components Model," Econometrica, Econometric Society, vol. 54(4), pages 869-880, July.
  75. Glewwe, Paul & Jacoby, Hanan G., 2004. "Economic growth and the demand for education: is there a wealth effect?," Journal of Development Economics, Elsevier, vol. 74(1), pages 33-51, June.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:cdi:wpaper:633. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vincent Mazenod)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.