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New methods for comparing literacy across populations: insights from the measurement of poverty

  • Kevin Denny

    (Institute for Fiscal Studies and University College Dublin)

This paper exploits an unusual policy reform that had the effect of reducing the direct cost of schooling in Ireland in the late 1960s. This gave rise to an increased level of schooling but with effects that vary substantially across family background. This interaction of educational reform and family background generates a set of instrumental variables that are used to estimate the return to schooling allowing for the endogeneity of schooling. Using a standard Mincer type model we find a large and well-determined rate of return of around 12% which are substantially higher than the OLS estimates of around 7%.

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File URL: http://www.ifs.org.uk/wps/wp0007.pdf
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Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W00/07.

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Length: 15 pp
Date of creation: Apr 2000
Date of revision:
Handle: RePEc:ifs:ifsewp:00/07
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  1. Kling, Jeffrey R, 2001. "Interpreting Instrumental Variables Estimates of the Returns to Schooling," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(3), pages 358-64, July.
  2. Callan, T. & Harmon, C.P., 1997. "The Economic Return to Schooling in Ireland," Papers 97/23, College Dublin, Department of Political Economy-.
  3. Tussing, A. Dale, 1978. "Irish Educational Expenditures - Past, Present, and Future," Research Series, Economic and Social Research Institute (ESRI), number GRS92.
  4. Uusitalo, R. & Conneely, K., 1998. "Estimating Heterogeneous Treatment Effects in the Becker Schooling Model," University of Helsinki, Department of Economics 435, Department of Economics.
  5. Joshua D. Angrist & Alan B. Krueger, 1990. "Does Compulsory School Attendance Affect Schooling and Earnings?," NBER Working Papers 3572, National Bureau of Economic Research, Inc.
  6. Costas Meghir & Marten Palme, 2000. "Assessing the Effect of Schooling on Earnings Using a Social Experiment," Econometric Society World Congress 2000 Contributed Papers 0670, Econometric Society.
  7. Tim Callan, 1991. "Male-Female Wage Differentials in Ireland," Papers WP028, Economic and Social Research Institute (ESRI).
  8. Orley Ashenfelter & Colm Harmon & Hessel Oosterbeek, 1999. "A Review of Estimates of the Schooling/Earnings Relationship, with Tests for Publication Bias," Working Papers 804, Princeton University, Department of Economics, Industrial Relations Section..
  9. Harmon, C & Ian Walker, 1995. "Estimates of the economic return to schooling for the UK," IFS Working Papers W95/12, Institute for Fiscal Studies.
  10. Lang, Kevin, 1993. "Ability Bias, Discount Rate Bias and the Return to Education," MPRA Paper 24651, University Library of Munich, Germany.
  11. 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.
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