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

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  • Kevin Denny

    () (Institute for Fiscal Studies and University College Dublin)

Abstract

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%.

Suggested Citation

  • Kevin Denny, 2000. "New methods for comparing literacy across populations: insights from the measurement of poverty," IFS Working Papers W00/07, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:ifsewp:00/07
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    File URL: http://www.ifs.org.uk/wps/wp0007.pdf
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    References listed on IDEAS

    as
    1. Tim Callan, 1991. "Male-Female Wage Differentials in Ireland," Papers WP028, Economic and Social Research Institute (ESRI).
    2. repec:fth:prinin:415 is not listed on IDEAS
    3. 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 358-364, July.
    4. 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.
    5. 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.
    6. Uusitalo, R. & Conneely, K., 1998. "Estimating Heterogeneous Treatment Effects in the Becker Schooling Model," University of Helsinki, Department of Economics 435, Department of Economics.
    7. Tussing, A. Dale, 1978. "Irish Educational Expenditures - Past, Present, and Future," Research Series, Economic and Social Research Institute (ESRI), number GRS92.
    8. Denny, K.J. & Harmon, C.P. & Redmond, S., 2000. "Cognitive Skills, Educational Attainment and Earnings -Evidence from the International Adult Literacy Survey," Papers 00/04, College Dublin, Department of Political Economy-.
    9. Callan, Tim & Harmon, Colm, 1999. "The economic return to schooling in Ireland," Labour Economics, Elsevier, vol. 6(4), pages 543-550, November.
    10. repec:fth:prinin:425 is not listed on IDEAS
    11. David Card, 1993. "Using Geographic Variation in College Proximity to Estimate the Return to Schooling," Working Papers 696, Princeton University, Department of Economics, Industrial Relations Section..
    12. Lang, Kevin, 1993. "Ability Bias, Discount Rate Bias and the Return to Education," MPRA Paper 24651, University Library of Munich, Germany.
    13. 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.
    14. 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.
    15. Henry S. Farber & Jeffrey R. Kling & Alan Krueger, 1999. "Interpreting Instrumental Variables Estimates of the Returns to Schooling," Working Papers 794, Princeton University, Department of Economics, Industrial Relations Section..
    16. Harmon, Harmon & Ian Walker, 1995. "Estimates of the economic return to schooling for the UK," IFS Working Papers W95/12, Institute for Fiscal Studies.
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    Cited by:

    1. Hati, Koushik Kumar, 2012. "Can Poverty be Educated Out?," MPRA Paper 57374, University Library of Munich, Germany.
    2. Rolf Aaberge & Andrea Brandolini, 2014. "Multidimensional poverty and inequality," Discussion Papers 792, Statistics Norway, Research Department.
    3. Brown, Giorgina & Micklewright, John & Schnepf, Sylke V. & Waldmann, Robert, 2005. "Cross-National Surveys of Learning Achievement: How Robust are the Findings?," IZA Discussion Papers 1652, Institute for the Study of Labor (IZA).
    4. Micklewright, John & Schnepf, Sylke V., 2006. "Inequality of Learning in Industrialised Countries," IZA Discussion Papers 2517, Institute for the Study of Labor (IZA).
    5. James Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster–Greer–Thorbecke (FGT) poverty measures: 25 years later," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 491-524, December.
    6. James E. Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster-Greer-Thorbecke (FGT) Poverty Measures: Twenty-Five Years Later," Working Papers 2010-14, The George Washington University, Institute for International Economic Policy.

    More about this item

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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