Estimating Marginal Returns to Education
Pedro Carneiro (),
James Heckman and
Edward Vytlacil ()
No 16474, NBER Working Papers from National Bureau of Economic Research, Inc
This paper estimates the marginal returns to college for individuals induced to enroll in college by different marginal policy changes. The recent instrumental variables literature seeks to estimate this parameter, but in general it does so only under strong assumptions that are tested and found wanting. We show how to utilize economic theory and local instrumental variables estimators to estimate the effect of marginal policy changes. Our empirical analysis shows that returns are higher for individuals with values of unobservables that make them more likely to attend college. We contrast the returns to well-defined marginal policy changes with IV estimates of the return to schooling. Some marginal policy changes inducing students into college produce very low returns.
JEL-codes: J31 (search for similar items in EconPapers)
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Published as Pedro Carneiro & James J. Heckman & Edward J. Vytlacil, 2011. "Estimating Marginal Returns to Education," American Economic Review, American Economic Association, vol. 101(6), pages 2754-81, October.
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Journal Article: Estimating Marginal Returns to Education (2011)
Working Paper: Estimating marginal returns to education (2010)
Working Paper: Estimating Marginal Returns to Education (2010)
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