Interpreting Instrumental Variables Estimates of the Returns to Schooling

28 Pages Posted: 28 Oct 2000 Last revised: 2 May 2021

See all articles by Jeffrey R. Kling

Jeffrey R. Kling

Government of the United States of America - Congressional Budget Office (CBO); National Bureau of Economic Research (NBER)

Date Written: October 2000

Abstract

This paper synthesizes economic insights from theoretical models of schooling choice based on individual benefits and econometric work interpreting instrumental variables estimates as weighted averages of individual-specific causal effects. Linkages are illustrated using college proximity to instrument for schooling. After characterizing groups differentially affected by the instrument according to family background, I directly compute weights underlying estimation of the overall return. In analyzing the level of schooling at which individuals change their behavior in response to the instrument, I demonstrate that this instrument has its greatest impact on the transition from high school to college. Specification robustness is also examined.

Suggested Citation

Kling, Jeffrey, Interpreting Instrumental Variables Estimates of the Returns to Schooling (October 2000). NBER Working Paper No. w7989, Available at SSRN: https://ssrn.com/abstract=247725

Jeffrey Kling (Contact Author)

Government of the United States of America - Congressional Budget Office (CBO) ( email )

Ford House Office Building
2nd & D Streets, SW
Washington, DC 20515-6925
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
45
Abstract Views
884
PlumX Metrics