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Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins

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  • Orley Ashenfelter
  • Cecilia Rouse

Abstract

We develop a model of optimal schooling investments and estimate it using new data on approximately 700 identical twins. We estimate an average return to schooling of 9 percent for identical twins, but estimated returns appear to be slightly higher for less able individuals. Simple cross-section estimates are marginally upward biased. These empirical results imply that abler individuals attain more schooling because they face lower marginal costs of schooling, not because of higher marginal benefits.

Suggested Citation

  • Orley Ashenfelter & Cecilia Rouse, 1998. "Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 253-284.
    • Handle: RePEc:oup:qjecon:v:113:y:1998:i:1:p:253-284.
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    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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