The Causal Effect of Education on Wages Revisited* |
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Authors: | Matt Dickson |
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Institution: | UCD Geary Institute, University College Dublin, Belfield, Dublin 4, Ireland (e‐mail: matt.dickson@ucd.ie) |
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Abstract: | This study estimates the return to education in Britain using two instrumental variable (IV) estimators: one exploits variation in schooling associated with early smoking, the other uses the raising of the school leaving age; both affect a sizeable proportion of the sample. Early smoking is found to be a strong and valid IV and unlike previous IV strategies uses variations in education at numerous points across the distributions of (i) education, and (ii) ability. Thus whilst still a ‘local average treatment effect’ the estimate is closer to the average effect of additional education, akin to least squares but corrected for endogeneity. |
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Keywords: | I20 J30 |
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