Schooling and Labor Market Consequences of School Construction in Indonesia: Comment

David Roodman

Papers from arXiv.org

Abstract: Duflo (2001) exploits a 1970s schooling expansion to estimate the returns to schooling in Indonesia. Under the study's difference-in-differences (DID) design, two patterns in the data--shallower pay scales for younger workers and negative selection in treatment--can violate the parallel trends assumption and upward-bias results. In response, I follow up later, test for trend breaks timed to the intervention, and perform changes-in-changes (CIC). I also correct data errors, cluster variance estimates, incorporate survey weights to correct for endogenous sampling, and test for (and detect) instrument weakness. Weak identification-robust inference yields positive but imprecise estimates. CIC estimates also tilt positive.

Date: 2022-07, Revised 2024-03
New Economics Papers: this item is included in nep-sea and nep-ure
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