Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/72446
Authors: 
Hogan, Vincent
Rigobon, Roberto
Year of Publication: 
2003
Series/Report no.: 
Working Paper Series, UCD Centre for Economic Research 03/01
Abstract: 
We apply a new estimator to the measurement of the economic returns to education. We control for endogenous education, unobserved ability and measurement error using only the natural heteroscedasticty of wages and education attainment. Our prefered estimate, 6.07%, is closer to the OLS estimate but smaller (and more precise) than the estimates typically reported by studies that use IV. Our results indicate that the biases generated by unobserved ability and measurement error tend to cancel each other out as suggested by Griliches (1977). We also present Monte Carlo evidence to show that the finite sample bias our estimator is small.
Subjects: 
Identification
Returns to Education
JEL: 
C30
I20
J31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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