Estimating the Returns to Schooling Using Cohort-Level Maternal Education as an Instrument

John Winters

No 8616, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Formal education is widely thought to be a major determinant of individual earnings. This paper uses the American Community Survey to examine the effect of formal schooling on worker wages. Given the potential endogeneity of education decisions, I instrument for individual schooling using cohort-level mean maternal years of schooling from previous decennial censuses. The instrumental variables results suggest that schooling has a significant positive effect on worker wages. Specifically, an additional year or schooling is estimated to increase hourly wages by 10 percent for men and 12.6 percent for women.

Keywords: human capital; education; returns to schooling; wages; maternal education (search for similar items in EconPapers)
JEL-codes: J24 J31 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2014-11
New Economics Papers: this item is included in nep-edu, nep-hrm and nep-lab
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Citations: View citations in EconPapers (2)

Published - published in: Economics Letters, 2015, 126 (1), 25-27

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Journal Article: Estimating the returns to schooling using cohort-level maternal education as an instrument (2015)
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