Estimating Heterogeneous Returns to Education in Germany via Conditional Second Moments

Nils Saniter

VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century from Verein für Socialpolitik / German Economic Association

Abstract: In this paper I investigate the causal returns to education for different educational groups in Germany. I circumvent potential drawbacks of IV by employing a new method by Klein and Vella (2010). In this approach identification is not based on instruments but on the presence of heteroskedasticity. Using data from the German Socio-Economic Panel Study (SOEP) I find that the causal return to education is 8.5% for the entire sample, 2% for graduates from the basic school track and 11% for graduates from a higher school track. Across these groups the endogeneity bias in simple OLS regressions varies significantly. This confirms recent evidence in the literature on Germany. Various robustness checks support my findings.

JEL-codes: C30 I21 J31 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-edu, nep-eur, nep-lab and nep-lma
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc12:62050

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