Estimating the Effects of Family Background on the Return to Schooling

Abstract

This article examines the causal link between family background characteristics-parental education and family size-and returns to schooling. I implement a model of schooling and earnings with heterogeneous returns to education using data from the Occupational Change in a Generation Survey. I find that men raised in larger families have substantially lower returns to education, whereas the combined effects of parental education are more modest. In addition, like other "supply-side" instrumental variables studies of the causal effect of education, I find two-stage least squares estimates that are larger than the corresponding ordinary least squares estimates. The results suggest an alternative explanation for this phenomenon: constant marginal return to schooling, combined with a negative absolute ability bias and a positive comparative advantage bias.

Estimating distributions of potential outcomes using local instrumental variables with an application to changes in college enrollment and wage inequality

“…These results confirm the findings in Willis and Rosen (1979), Carneiro, Heckman and Vytlacil (2007), and Deschenes (2007). Single skill models of the labor market implicit in standard specifications of earnings equations with no heterogeneity predict college goers to have higher earnings both in the high school and college sectors than high school graduates.…”

The effects of labor supply shocks on labor market outcomes: Evidence from the Israeli–Palestinian conflict

“…Column 2 in Table 4 shows that the percentage of workers who do travel to a di¤erent city in the West Bank did not change over the sample period. 12 However, Table 4 does not provide any information about permanent migration across cities in the West Bank or from cities in the West…”

Born to Lead? The Effect of Birth Order on Noncognitive Abilities

“…For example, a third born son who is the first male child in the family may have a different experience, and outcome, from a third born son who is the third male child in the family. Existing research has been mixed as to the effect of the sex composition of siblings on children's outcomes-work by Dahl and Moretti (2004), Butcher and Case (1994), Conley (2000), and Deschenes (2007) all find some evidence of sex-composition effects, while Kaestner (1997) and Hauser and Kuo (1998) find no evidence for such heterogeneities. Table 6 addresses this issue by allowing for heterogeneous effects of birth order depending on the sex composition of the family.…”