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The effects of educational choices on labor market, health, and social outcomes

  • James J. Heckman

    ()

    (University of Chicago, Department of Economics)

  • John Eric Humphries

    (University of Chicago, Department of Economics)

  • Sergio Urzua

    (University of Maryland, Department of Economics)

  • Gregory Veramendi

    (Aarhus University, School of Economics and Management)

Using a sequential model of educational choices, we investigate the effect of educational choices on labor market, health, and social outcomes. Unobserved endowments drive the correlations in unobservables across choice and outcome equations. We proxy these endowments with numerous measurements and account for measurement error in the proxies. For each schooling level, we estimate outcomes for labor market, health, and social outcome. This allows us to generate counter-factual outcomes for dynamic choices and a variety of policy and treatment effects. In our framework, responses to treatment vary among observationally identical persons and agents may select into the treatment on the basis of their responses. We find important effects of early cognitive and socio-emotional abilities on schooling choices, labor market outcomes, adult health, and social outcomes. Education at most levels causally produces gains on labor market, health, and social outcomes. We estimate the distribution of responses to education and find substantial heterogeneity on which agents act.

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File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/HHUV_2010_effect-edu-choice.pdf
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Paper provided by Human Capital and Economic Opportunity Working Group in its series Working Papers with number 2011-002.

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Date of creation: 2010
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Handle: RePEc:hka:wpaper:2011-002
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  1. Scott Adams, 2002. "Educational Attainment and Health: Evidence from a Sample of Older Adults," Education Economics, Taylor & Francis Journals, vol. 10(1), pages 97-109.
  2. Borghans Lex & Golsteyn Bart & Heckman James & Humphries John Eric, 2011. "Identification Problems in Personality Psychology," ROA Research Memorandum 004, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  3. M. Christopher Auld & Nirmal Sidhu, 2004. "Schooling, cognitive ability, and health," HEW 0406001, EconWPA.
  4. Silles, Mary A., 2009. "The causal effect of education on health: Evidence from the United Kingdom," Economics of Education Review, Elsevier, vol. 28(1), pages 122-128, February.
  5. Pedro Carneiro & James J. Heckman, 2002. "The Evidence on Credit Constraints in Post--secondary Schooling," Economic Journal, Royal Economic Society, vol. 112(482), pages 705-734, October.
  6. Arendt, Jacob Nielsen, 2005. "Does education cause better health? A panel data analysis using school reforms for identification," Economics of Education Review, Elsevier, vol. 24(2), pages 149-160, April.
  7. Mathilde Almlund & Angela Lee Duckworth & James J. Heckman & Tim D. Kautz, 2011. "Personality Psychology and Economics," NBER Working Papers 16822, National Bureau of Economic Research, Inc.
  8. Gabriella Conti & James Heckman & Sergio Urzua, 2010. "The Education-Health Gradient," American Economic Review, American Economic Association, vol. 100(2), pages 234-38, May.
  9. Michael P. Keane & Kenneth I. Wolpin, 1995. "The career decisions of young men," Working Papers 559, Federal Reserve Bank of Minneapolis.
  10. Michael B. Coelli & David A. Green & William P. Warburton, 2004. "Breaking the cycle? The effect of education on welfare receipt among children of welfare recipients," IFS Working Papers W04/14, Institute for Fiscal Studies.
  11. Pedro Carneiro & Karsten T. Hansen & James J. Heckman, 2003. "Estimating Distributions of Treatment Effects with an Application to the Returns to Schooling and Measurement of the Effects of Uncertainty on College," NBER Working Papers 9546, National Bureau of Economic Research, Inc.
  12. Donald Kenkel & Dean Lillard & Alan Mathios, 2006. "The Roles of High School Completion and GED Receipt in Smoking and Obesity," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 635-660, July.
  13. Robert Kaestner, 2009. "Adolescent Cognitive and Non-cognitive Correlates of Adult Health," NBER Working Papers 14924, National Bureau of Economic Research, Inc.
  14. Heckman, James J. & Navarro, Salvador, 2005. "Dynamic Discrete Choice and Dynamic Treatment Effects," IZA Discussion Papers 1790, Institute for the Study of Labor (IZA).
  15. Pedro Carneiro & James Heckman & Edward Vytlacil, 2009. "Evaluating marginal policy changes and the average effect of treatment for individuals at the margin," CeMMAP working papers CWP21/09, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  16. Comay, Yochanan & Melnik, A & Pollatschek, M A, 1973. "The Option Value of Education and the Optimal Path for Investment in Human Capital," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(2), pages 421-35, June.
  17. Milligan, Kevin & Moretti, Enrico & Oreopoulos, Philip, 2004. "Does education improve citizenship? Evidence from the United States and the United Kingdom," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1667-1695, August.
  18. John Cawley & Karen Conneely & James Heckman & Edward Vytlacil, 1996. "Cognitive Ability, Wages, and Meritocracy," NBER Working Papers 5645, National Bureau of Economic Research, Inc.
  19. Aakvik, Arild & Heckman, James J. & Vytlacil, Edward J., 2005. "Estimating treatment effects for discrete outcomes when responses to treatment vary: an application to Norwegian vocational rehabilitation programs," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 15-51.
  20. Cutler, David M. & Lleras-Muney, Adriana, 2010. "Understanding differences in health behaviors by education," Journal of Health Economics, Elsevier, vol. 29(1), pages 1-28, January.
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