Working Paper: NBER ID: w5450
Authors: David Card; Alan B. Krueger
Abstract: This paper presents an overview and interpretation of the literature relating school quality to students' subsequent labor market success. We begin with a simple theoretical model that describes the determination of schooling and earnings with varying school quality. A key insight of the model is that changes in school quality may affect the characteristics of individuals who choose each level of schooling, imparting a potential selection bias to comparisons of earnings conditional on education. We then summarize the literature that relates school resources to students' earnings and educational attainment. A variety of evidence suggests that students who were educated in schools with more resources tend to earn more and have higher schooling. We also discuss two important issues in the literature: the tradeoffs involved in using school-level versus more aggregated (district or state-level) quality measures; and the evidence on school quality effects for African Americans educated in the segregated school systems of the South.
Keywords: School Quality; Labor Market Outcomes; Educational Attainment
JEL Codes: I20; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher school quality (I21) | Increased earnings (J31) |
| Higher school quality (I21) | Higher educational attainment (I23) |
| Higher educational attainment (I23) | Increased earnings (J31) |
| Higher school quality (I21) | Increased payoff to education (I26) |