Working Paper: NBER ID: w3358
Authors: David Card; Alan Krueger
Abstract: This paper estimates the effects of school quality - - measured by the pupil-teacher ratio, the average term length, and the relative pay of teachers -- on the rate of return to education for men born between 1920 and 1949. Using earnings data from the 1980 Census, we find that men who were educated in states with higher quality schools have a higher return to additional years of schooling, holding constant their current state of residence, their state of birth, the average return to education in the region where they currently reside, and other factors. A decrease in the pupil-teacher ratio from 30 to 25, for example, is associated with a 0.4 percentage point increase in the rate of return to education. The estimated relationship between the return to education and measures of school quality is similar for blacks and whites. Since improvements in school quality for black students were mainly driven by political and judicial pressures, we argue that the evidence for blacks reinforces a causal interpretation of the link between school quality and earnings. We also find that returns to schooling are higher for students educated in states with a higher fraction of female teachers, and in states with higher average teacher education. Holding constant school quality measures, however, we find no evidence that parental income or education affects state-level rates of return.
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Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| school quality (I21) | returns to education (I26) |
| pupil-teacher ratio (A21) | returns to education (I26) |
| teacher pay (J33) | returns to education (I26) |
| fraction of female teachers (J21) | returns to education (I26) |
| average teacher education (A21) | returns to education (I26) |
| parental income (D31) | state-level rates of return (H79) |
| parental education (I24) | state-level rates of return (H79) |