Working Paper: NBER ID: w13534
Authors: Robert Moffitt
Abstract: A long-standing issue in the literature on education is whether marginal returns to education fall as education rises. If the population differs in its rate of return, a closely related question is whether marginal returns to higher education fall as a greater fraction of the population enrolls. This paper proposes a nonparametric method of estimating marginal treatment effects in heterogeneous populations, and applies it to this question, examining returns to higher education in the UK. The results indicate that marginal returns to higher education fall as the proportion of the population with higher education rises, consistent with the Becker Woytinsky Lecture hypothesis.
Keywords: Higher Education; Marginal Returns; Heterogeneity; Instrumental Variables
JEL Codes: C21; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher education participation rates (I23) | Earnings (J31) |
| Higher education participation rates (I23) | Marginal returns to higher education (I26) |
| Marginal returns to higher education (I26) | Earnings (J31) |
| Higher education participation rates (I23) | Average treatment effect (ATE) (C22) |
| Individual heterogeneity (D29) | Marginal treatment effects (MTE) (C32) |