Working Paper: NBER ID: w9881
Authors: Karsten Hansen; James J. Heckman; Kathleen J. Mullen
Abstract: This paper develops two methods for estimating the effect of schooling on achievement test scores that control for the endogeneity of schooling by postulating that both schooling and test scores are generated by a common unobserved latent ability. These methods are applied to data on schooling and test scores. Estimates from the two methods are in close agreement. We find that the effects of schooling on test scores are roughly linear across schooling levels. The effects of schooling on measured test scores are slightly larger for lower latent ability levels. We find that schooling increases the AFQT score on average between 2 and 4 percentage points, roughly twice as large as the effect claimed by Herrnstein and Murray (1994) but in agreement with estimates produced by Neal and Johnson (1996) andWinship and Korenman (1997). We extend the previous literature by estimating the impact of schooling on measured test scores at various quantiles of the latent ability distribution.
Keywords: No keywords provided
JEL Codes: C35; C15; I21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| latent ability (D84) | schooling (I21) |
| latent ability (D84) | AFQT score (J45) |
| test scores (C52) | schooling (I21) |
| schooling (I21) | AFQT score (J45) |
| schooling (I21) | test scores (C52) |