Year: 1993
Type: report
Abstract: I reconsider various methods for correcting for bias in estimates of the returns to schooling. I argue that the literature on ability bias has ignored complications implicit in theoretical formulations of the choice of human capital. In particular, such models imply that adding ability to the wage equation may not be informative about the importance of bias and that variables correlated with the discount rate will generally not be suitable instruments for education. Indeed discount rate variation may generate downward bias. Estimation of a structural wage/schooling model suggests that OLS estimates of the return to schooling are biased downwards.
Author: Kevin Lang
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
SDG: Quality education
Open Access status: green
OpenAlex ID: W1940676734