Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins

43 Pages Posted: 11 Sep 2000 Last revised: 6 Oct 2010

See all articles by Orley Ashenfelter

Orley Ashenfelter

Princeton University - Industrial Relations Section; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Cecilia E. Rouse

Princeton University - Industrial Relations Section; National Bureau of Economic Research (NBER)

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Date Written: July 1997

Abstract

We develop a model of optimal schooling investments and estimate it using new data on approximately 700 identical twins. We estimate an average return to schooling of 9 percent for identical twins, but estimated returns appear to be slightly higher for less able individuals. Simple cross-section estimates are marginally upward biased. These empirical results imply that more able individuals attain more schooling because they face lower marginal costs of schooling, not because of higher marginal benefits.

Suggested Citation

Ashenfelter, Orley C. and Rouse, Cecilia E., Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins (July 1997). NBER Working Paper No. w6106. Available at SSRN: https://ssrn.com/abstract=225880

Orley C. Ashenfelter (Contact Author)

Princeton University - Industrial Relations Section ( email )

Princeton, NJ 08544-2098
United States
609-258-4040 (Phone)
609-258-2907 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Cecilia E. Rouse

Princeton University - Industrial Relations Section ( email )

Princeton, NJ 08544-2098
United States
609-258-4042 (Phone)
609-258-2907 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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