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Estimating the Return to Endogenous Schooling Decisions via Conditional Second Moments

Estimating the Return to Endogenous Schooling Decisions via Conditional Second Moments Abstract: This paper employs conditional second moments to identify the impact of education in wage regressions where education is treated as endogenous. This approach avoids the use of instrumental variables in a setting where instruments are frequently not available. We employ this methodology to estimate the returns to schooling for a sample of Australian workers. We find that accounting for the endogeneity of education in this manner increases the estimated return to education from 6 percent to 10 percent. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Human Resources University of Wisconsin Press

Estimating the Return to Endogenous Schooling Decisions via Conditional Second Moments

Klein, Roger W.
Journal of Human Resources , Volume 44 (4) – Apr 4, 2009
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Publisher
University of Wisconsin Press
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Copyright © University of Wisconsin Press
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1548-8004
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Abstract

Abstract: This paper employs conditional second moments to identify the impact of education in wage regressions where education is treated as endogenous. This approach avoids the use of instrumental variables in a setting where instruments are frequently not available. We employ this methodology to estimate the returns to schooling for a sample of Australian workers. We find that accounting for the endogeneity of education in this manner increases the estimated return to education from 6 percent to 10 percent.

Journal

Journal of Human Resources – University of Wisconsin Press

Published: Apr 4, 2009

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