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AbstractThis paper examines the causal association between family background characteristics--parental education and family size-and returns to schooling using data from the Occupational Change in a Generation Survey. I first develop a formal model of schooling and earnings, with heterogeneous returns to education. Family environment is shown to influence the marginal return to schooling through its effects on the marginal benefit and the marginal cost of an additional year of education. Using two types of exclusion restrictions, I find that men raised in larger families have substantially lower returns to education, while the combined effects of parental education on the returns to education are more modest. I also examine the difference between OLS and TSLS estimates of the return to schooling. Like other “supply-side” IV studies of the causal effect of education, this paper documents TSLS estimates that are larger than the corresponding OLS estimates. The results of this paper provide an alternative explanation for this phenomenon: constant marginal returns to schooling, combined with a negative ability bias and a positive self-selection bias (i.e. non-hierarchical sorting).
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Cited by:
- Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2010.
"Small Family, Smart Family? Family Size and the IQ Scores of Young Men,"
Journal of Human Resources, University of Wisconsin Press, vol. 45(1).
- Salvanes, Kjell G & Black, Sandra & Devereux, Paul J., 2007.
"Small Family, Smart Family? Family Size and the IQ Scores of Young Men,"
CEPR Discussion Papers
6443, C.E.P.R. Discussion Papers.
- Paul J. Devereux & Sandra E. Black & Kjell G. Salvanes, 2007.
"Small family, smart family? Family size and the IQ scores of young men,"
Open Access publications
10197/739, School of Economics, University College Dublin.
- Black, Sandra E. & Devereux, Paul J. & Salvanes, Kjell G., 2007.
"Small Family, Smart Family? Family Size and the IQ Scores of Young Men,"
IZA Discussion Papers
3011, Institute of Labor Economics (IZA).
- Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2007.
"Small Family, Smart Family? Family Size and the IQ Scores of Young Men,"
NBER Working Papers
13336, National Bureau of Economic Research, Inc.
- Zhong, Hai, 2014.
"The effect of sibling size on children's health: a regression discontinuity design approach based on China's one-child policy,"
China Economic Review, Elsevier, vol. 31(C), pages 156-165.
- Sandra E. Black & Erik Grönqvist & Björn Öckert, 2018.
"Born to Lead? The Effect of Birth Order on Noncognitive Abilities,"
The Review of Economics and Statistics, MIT Press, vol. 100(2), pages 274-286, May.
- Black, Sandra E. & Grönqvist, Erik & Öckert, Björn, 2016.
"Born to lead? The effect of birth order on non-cognitive abilities,"
Working Paper Series
2016:18, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- Black, Sandra E. & Grönqvist, Erik & Öckert, Björn, 2017.
"Born to Lead? The Effect of Birth Order on Non-Cognitive Abilities,"
IZA Discussion Papers
10560, Institute of Labor Economics (IZA).
- Sandra E. Black & Erik Grönqvist & Björn Öckert, 2017.
"Born to Lead? The Effect of Birth Order on Non-Cognitive Abilities,"
NBER Working Papers
23393, National Bureau of Economic Research, Inc.
- Andrea Mercatanti, 2008.
"A likelihood-based analysis for relaxing the exclusion restriction in randomized experiments with imperfect compliance,"
Temi di discussione (Economic working papers)
683, Bank of Italy, Economic Research and International Relations Area.
- Pohlmeier, Winfried & Pfeiffer, Friedhelm & Maier, Michael, 2004.
"Returns to Education and Individual Heterogeneity,"
ZEW Discussion Papers
04-34, ZEW - Leibniz Centre for European Economic Research.
- Song, Moohoun & Orazem, Peter, 2005.
"Returns to Graduate and Professional Education: The Roles of Mathematical and Verbal Skills by Major,"
Staff General Research Papers Archive
12432, Iowa State University, Department of Economics.
- Song, Moohoun & Orazem, Peter F., 2005.
"Returns to Graduate and Professional Education: The Roles of Mathematical and Verbal Skills by Major,"
Working Papers
18207, Iowa State University, Department of Economics.
- Song, Moohoun & Orazem, Peter F., 2007.
"Returns to Graduate and Professional Education: The Roles of Mathematical and Verbal Skills by Major,"
ISU General Staff Papers
200701010800001230, Iowa State University, Department of Economics.
- Lionel Perini, 2014.
"Who Benefits Most from University Education in Switzerland?,"
Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 150(II), pages 119-159, June.
- Song, Moohoun & Orazem, Peter F. & Wohlgemuth, Darin, 2008.
"The role of mathematical and verbal skills on the returns to graduate and professional education,"
Economics of Education Review, Elsevier, vol. 27(6), pages 664-675, December.
- Song, Moohoun & Orazem, Peter & Wohlgemuth, Darin, 2007.
"The Role of Mathematical and Verbal Skills on the Returns to Graduate and Professional Education,"
Staff General Research Papers Archive
12843, Iowa State University, Department of Economics.
- Song, Moohoun & Orazem, Peter F. & Wohlgemuth, Darin, 2007.
"The Role of Mathematical and Verbal Skills on the Returns to Graduate and Professional Education,"
Working Papers
7346, Iowa State University, Department of Economics.
- Song, Moohoun & Orazem, Peter F. & Wohlgemuth, Darin, 2008.
"The role of mathematical and verbal skills on the returns to graduate and professional education,"
ISU General Staff Papers
200812010800001230, Iowa State University, Department of Economics.
- Sandra E. Black & Paul G. Devereux & Kjell G. Salvanes, 2004.
"The More the Merrier? The Effect of Family Composition on Children's Education,"
NBER Working Papers
10720, National Bureau of Economic Research, Inc.
- Black, Sandra E. & Devereux, Paul J. & Salvanes, Kjell G., 2004.
"The More the Merrier? The Effect of Family Composition on Children's Education,"
IZA Discussion Papers
1269, Institute of Labor Economics (IZA).
- Paul J. Devereux & Sandra E. Black & Kjell G. Salvanes, 2004.
"The more the merrier? The effect of family composition on children's education,"
Open Access publications
10197/735, School of Economics, University College Dublin.
- Feng Yao & Junsen Zhang, 2015.
"Efficient kernel-based semiparametric IV estimation with an application to resolving a puzzle on the estimates of the return to schooling,"
Empirical Economics, Springer, vol. 48(1), pages 253-281, February.
- Sanni Breining & Joseph Doyle & David N. Figlio & Krzysztof Karbownik & Jeffrey Roth, 2020.
"Birth Order and Delinquency: Evidence from Denmark and Florida,"
Journal of Labor Economics, University of Chicago Press, vol. 38(1), pages 95-142.
- Pedro Carneiro & Sokbae Lee, 2011.
"Trends in Quality-Adjusted Skill Premia in the United States, 1960-2000,"
American Economic Review, American Economic Association, vol. 101(6), pages 2309-2349, October.
- Pedro Carneiro & Sokbae (Simon) Lee, 2009.
"Trends in quality-adjusted skill premia in the United States, 1960-2000,"
CeMMAP working papers
CWP02/09, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Carneiro, Pedro & Lee, Sokbae, 2010.
"Trends in Quality-Adjusted Skill Premia in the United States, 1960-2000,"
IZA Discussion Papers
5295, Institute of Labor Economics (IZA).
- Kasey S. Buckles & Elizabeth L. Munnich, 2012.
"Birth Spacing and Sibling Outcomes,"
Journal of Human Resources, University of Wisconsin Press, vol. 47(3), pages 613-642.
- Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2005.
"The More the Merrier? The Effect of Family Size and Birth Order on Children's Education,"
The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 669-700.
- Ahmad Rizki Sridadi & Gigih Prihantono, 2018.
"Gender Inequality in Wage Rate in Indonesia,"
International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(3), pages 160-160, February.
- repec:got:cegedp:108 is not listed on IDEAS
- Krenz, Astrid, 2010.
"La distinction reloaded: Returns to education, family background, cultural and social capital in Germany,"
University of Göttingen Working Papers in Economics
108, University of Goettingen, Department of Economics.
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