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Instrument selection: The case of teenage childbearing and women's educational attainment

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  • D. Klepinger
  • S. Lundberg
  • R. Plotnick

Abstract

Recent research has identified situations in which instrumental variables (IV) estimators are severely biased and has suggested diagnostic tests to identify such situations. We suggest a number of alternative techniques for choosing a set of instruments that satisfy these tests from a universe of a priori plausible candidates, and we apply them to a study of the effects of adolescent childbearing on the educational attainment of young women. We find that substantive results are sensitive to instrument choice, and make two recommendations to the practical researcher: First, it is prudent to begin with a large set of potential instruments, when possible, and pare it down through formal testing rather than to rely on a minimal instrument set justified on a priori grounds. Second, the application of more restrictive tests of instrument validity and relevance can yield results very different from those based on less restrictive tests that produce a more inclusive set of instruments, and is the preferred, conservative approach when improper instrument choice can lead to biased estimates.

Suggested Citation

  • D. Klepinger & S. Lundberg & R. Plotnick, "undated". "Instrument selection: The case of teenage childbearing and women's educational attainment," Institute for Research on Poverty Discussion Papers 1077-95, University of Wisconsin Institute for Research on Poverty.
  • Handle: RePEc:wop:wispod:1077-95
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    14. Klepinger, D. & Lundberg, S. & Plotnick, R., 1994. "Adolescent Fertility and the Education Attainment of Young Women," Discussion Papers in Economics at the University of Washington 94-5, Department of Economics at the University of Washington.
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    Cited by:

    1. Zivot, Eric & Startz, Richard & Nelson, Charles R, 1998. "Valid Confidence Intervals and Inference in the Presence of Weak Instruments," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(4), pages 1119-1146, November.
    2. Christina J. Diaz & Jeremy E. Fiel, 2016. "The Effect(s) of Teen Pregnancy: Reconciling Theory, Methods, and Findings," Demography, Springer;Population Association of America (PAA), vol. 53(1), pages 85-116, February.
    3. Zimmerman, Paul R. & Benson, Bruce L., 2007. "Alcohol and rape: An "economics-of-crime" perspective," International Review of Law and Economics, Elsevier, vol. 27(4), pages 442-473, December.
    4. Daniel Klepinger & Shelly Lundberg & Robert Plotnick, 1999. "How Does Adolescent Fertility Affect the Human Capital and Wages of Young Women?," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 421-448.
    5. Susan Averett & David Stifel, 2010. "Race and gender differences in the cognitive effects of childhood overweight," Applied Economics Letters, Taylor & Francis Journals, vol. 17(17), pages 1673-1679.
    6. Mark J. Browne & Ellen S. Pryor & Bob Puelz, 2004. "The Effect of Bad-Faith Laws on First-Party Insurance Claims Decisions," The Journal of Legal Studies, University of Chicago Press, vol. 33(2), pages 355-390, June.
    7. Budría, Santiago & Pereira, Pedro T., 2004. "On the Returns to Training in Portugal," IZA Discussion Papers 1429, Institute for the Study of Labor (IZA).

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