Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States

68 Pages Posted: 27 Apr 2000 Last revised: 8 Sep 2010

See all articles by David Card

David Card

University of California, Berkeley - Department of Economics; Institute for the Study of Labor (IZA); National Bureau of Economic Research (NBER)

Alan B. Krueger

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

Date Written: May 1990

Abstract

This paper estimates the effects of school quality - - measured by the pupil-teacher ratio, the average term length, and the relative pay of teachers -- on the rate of return to education for men born between 1920 and 1949. Using earnings data from the 1980 Census, we find that men who were educated in states with higher quality schools have a higher return to additional years of schooling, holding constant their current state of residence, their state of birth, the average return to education in the region where they currently reside, and other factors. A decrease in the pupil-teacher ratio from 30 to 25, for example, is associated with a 0.4 percentage point increase in the rate of return to education. The estimated relationship between the return to education and measures of school quality is similar for blacks and whites. Since improvements in school quality for black students were mainly driven by political and judicial pressures, we argue that the evidence for blacks reinforces a causal interpretation of the link between school quality and earnings. We also find that returns to schooling are higher for students educated in states with a higher fraction of female teachers, and in states with higher average teacher education. Holding constant school quality measures, however, we find no evidence that parental income or education affects state-level rates of return.

Suggested Citation

Card, David E. and Krueger, Alan B., Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States (May 1990). NBER Working Paper No. w3358. Available at SSRN: https://ssrn.com/abstract=226659

David E. Card (Contact Author)

University of California, Berkeley - Department of Economics ( email )

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Institute for the Study of Labor (IZA)

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National Bureau of Economic Research (NBER)

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Alan B. Krueger

Princeton University - Industrial Relations Section ( email )

Princeton, NJ 08544-2098
United States
609-258-4046 (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

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