Estimates of the Returns to Schooling From Sibling Data: Fathers, Sons and Brothers

Orley Ashenfelter and David Zimmerman

No 4491, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this paper we use data on brothers, and fathers and sons, to estimate the economic returns to schooling. Our goal is to determine whether the correlation between earnings and schooling is due, in part, to the correlation between family backgrounds and schooling. The basic idea is to contrast the differences between the schooling of brothers, and fathers and sons, with the differences in their respective earnings. Since individuals linked by family affiliation are more likely to have similar innate ability and family backgrounds than randomly selected individuals our procedure provides a straightforward control for unobserved family attributes. Our empirical results indicate that in the sample of brothers the ordinary least squares estimates of the return to schooling may be biased upward by some 25% by the omission of family background factors. Adjustments for measurement error, however, imply that the intrafamily estimate of the returns to schooling is biased downward by about 25% also, so that the ordinary least squares estimate suffers from very little overall bias. Using data on fathers and sons introduces some ambiguity into these findings, as commonly used specification tests reject our simplest models of the role of family background in the determination of earnings.

JEL-codes: J31 (search for similar items in EconPapers)
Date: 1993-10
Note: LS
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published as Review of Economics & Statistics, Vol. 79, no. 1, (February 1997), pp. 1-9.

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Related works:
Journal Article: Estimates Of The Returns To Schooling From Sibling Data: Fathers, Sons, And Brothers (1997)
Working Paper: Estimates of the Return to Schooling From Sibling Data: Fathers, Sons and Brothers (1993)
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