Working Paper: NBER ID: w7457
Authors: Orley Ashenfelter; Colm Harmon; Hessel Oosterbeek
Abstract: In this paper we provide an analytical review of previous estimates of the rate of return on schooling investments and measure how these estimates vary by country, over time, and by estimation method. We find evidence reporting (or file drawer') bias in the estimates and, after due account is taken of this bias, we find that differences due to estimation method are much smaller than is sometimes reported, although some are statistically significant. We also find that estimated returns are higher in the U.S. and they have increased in the last two decades.
Keywords: Schooling; Earnings; Publication Bias
JEL Codes: I2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Reporting Bias (C83) | Estimates of Schooling-Earnings Relationship (I26) |
| Estimation Methods (C51) | Differences in Estimated Returns (C13) |
| Instrument Correlation with Earnings (C10) | Upward Bias in IV Estimates (C26) |
| Time (C41) | Increased Estimated Returns (C13) |
| Schooling (I21) | Earnings (J31) |
| Instrumental Variables (C36) | Causal Effect of Schooling on Earnings (J24) |
| Schooling (I21) | Higher Estimated Returns in the U.S. (N22) |