Working Paper: NBER ID: w7444
Authors: Daron Acemoglu; Joshua Angrist
Abstract: Average schooling in US states is highly correlated with state wage levels, even after controlling for the direct effect of schooling on individual wages. We use an instrumental variables strategy to determine whether this relationship is driven by social returns to education. The instrumentals for average schooling are derived from information on the child labor laws and compulsory attendance laws that affected men in our Census samples, while quarter of birth is used as an instrument for individual schooling. This results in precisely estimated private returns to education of about seven percent, and small social returns, typically less than one percent, that are not significantly different from zero.
Keywords: No keywords provided
JEL Codes: I20; J31; J24; D62; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| average schooling levels (I21) | individual wages (J31) |
| CSLs (Y90) | average schooling levels (I21) |
| average schooling levels (I21) | private returns to education (I26) |
| individual schooling (I21) | individual wages (J31) |
| CSLs (Y90) | individual schooling (I21) |
| average schooling levels (I21) | social returns to education (I26) |