Further Estimates of the Economic Return to Schooling from a New Sample of Twins
Princeton University Industrial Relations Section Working Paper No. 388
Posted: 4 Mar 1998
Date Written: 1997
In a recent and widely cited paper, Ashenfelter and Krueger (1994) use a new sample of identical twins to test whether schooling represents an investment in human capital or is merely a proxy for genetic ability. I re-examine Ashenfelter and Krueger's estimates using three additional years of the twins survey. I estimate that the return to schooling among identical twins is about 10-12 percent per year of schooling completed. Most importantly, unlike the results reported in Ashenfelter and Krueger, I find that the within-twin regression estimate of the return to schooling is smaller than the cross-sectional estimate, implying a small upward bias in the cross-sectional estimate.
JEL Classification: I2, J24
Suggested Citation: Suggested Citation