RT Journal Article
SR Electronic
T1 Estimating the Return to Endogenous Schooling Decisions via Conditional Second Moments
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 1047
OP 1065
DO 10.3368/jhr.44.4.1047
VO 44
IS 4
A1 Klein, Roger
A1 Vella, Francis
YR 2009
UL http://jhr.uwpress.org/content/44/4/1047.abstract
AB This paper employs conditional second moments to identify the impact of education in wage regressions where education is treated as endogenous. This approach avoids the use of instrumental variables in a setting where instruments are frequently not available. We employ this methodology to estimate the returns to schooling for a sample of Australian workers. We find that accounting for the endogeneity of education in this manner increases the estimated return to education from 6 percent to 10 percent.