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Labor Market Effects of School Quality: Theory and Evidence

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Author Info
David Card
Alan B. Krueger

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Abstract

This paper presents an overview and interpretation of the literature relating school quality to students' subsequent labor market success. We begin with a simple theoretical model that describes the determination of schooling and earnings with varying school quality. A key insight of the model is that changes in school quality may affect the characteristics of individuals who choose each level of schooling, imparting a potential selection bias to comparisons of earnings conditional on education. We then summarize the literature that relates school resources to students' earnings and educational attainment. A variety of evidence suggests that students who were educated in schools with more resources tend to earn more and have higher schooling. We also discuss two important issues in the literature: the tradeoffs involved in using school-level versus more aggregated (district or state-level) quality measures; and the evidence on school quality effects for African Americans educated in the segregated school systems of the South.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5450.

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Date of creation: Feb 1996
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Handle: RePEc:nbr:nberwo:5450

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I20 - Health, Education, and Welfare - - Education - - - General

References listed on IDEAS
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  1. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-81, September. [Downloadable!] (restricted)
  2. Betts, Julian R, 1995. "Does School Quality Matter? Evidence from the National Longitudinal Survey of Youth," The Review of Economics and Statistics, MIT Press, vol. 77(2), pages 231-50, May. [Downloadable!] (restricted)
  3. repec:fth:prinin:335 is not listed on IDEAS
  4. Link, Charles R & Ratledge, Edward C & Lewis, Kenneth A, 1976. "Black-White Differences in Returns to Schooling: Some New Evidence," American Economic Review, American Economic Association, vol. 66(1), pages 221-23, March. [Downloadable!] (restricted)
  5. Hanushek, Eric A., 2006. "School Resources," Handbook of the Economics of Education, Elsevier. [Downloadable!] (restricted)
  6. Willis, Robert J & Rosen, Sherwin, 1979. "Education and Self-Selection," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages S7-36, October. [Downloadable!] (restricted)
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  7. Grogger, Jeff, 1996. "Does School Quality Explain the Recent Black/White Wage Trend?," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 231-53, April. [Downloadable!] (restricted)
  8. Willis, Robert J., 1987. "Wage determinants: A survey and reinterpretation of human capital earnings functions," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 10, pages 525-602 Elsevier. [Downloadable!] (restricted)
  9. Michael Boozer & Alan Krueger & Shari Wolkon, 1992. "Race and School Quality Since Brown vs. Board of Education," Working Papers 681, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
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  10. Paul Wachtel, 1975. "The Returns to Investment in Higher Education: Another View," NBER Chapters, in: Education, Income, and Human Behavior, pages 151-170 National Bureau of Economic Research, Inc. [Downloadable!]
  11. Ribar, David C, 1994. "Teenage Fertility and High School Completion," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 413-24, August. [Downloadable!] (restricted)
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  12. Link, Charles & Ratledge, Edward & Lewis, Kenneth, 1980. "The Quality of Education and Cohort Variation in Black-White Earnings Differentials: Reply," American Economic Review, American Economic Association, vol. 70(1), pages 196-203, March. [Downloadable!] (restricted)
  13. repec:fth:prinin:301 is not listed on IDEAS
  14. Richard J. Murnane & John B. Willett & Frank Levy, 1995. "The Growing Importance of Cognitive Skills in Wage Determination," NBER Working Papers 5076, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Jin Huem Park, 1994. "Returns to Schooling: A Peculiar Deviation from Linearity," Working Papers 714, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  16. Akin, John S & Garfinkel, Irv, 1980. "The Quality of Education and Cohort Variation in Black-White Earnings Differentials: Comment," American Economic Review, American Economic Association, vol. 70(1), pages 186-91, March. [Downloadable!] (restricted)
  17. Morgenstern, Richard D, 1973. "Direct and Indirect Effects on Earnings of Schooling and Socio-Economic Background," The Review of Economics and Statistics, MIT Press, vol. 55(2), pages 225-33, May. [Downloadable!] (restricted)
  18. Card, David & Krueger, Alan B, 1992. "School Quality and Black-White Relative Earnings: A Direct Assessment," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 151-200, February. [Downloadable!] (restricted)
    Other versions:
  19. Card, David & Krueger, Alan B, 1992. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 1-40, February. [Downloadable!] (restricted)
    Other versions:
  20. Akerhielm, Karen, 1995. "Does class size matter?," Economics of Education Review, Elsevier, vol. 14(3), pages 229-241, September. [Downloadable!] (restricted)
  21. Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-77, September. [Downloadable!] (restricted)
  22. James Heckman & Anne Layne-Farrar & Petra Todd, 1995. "Does Measured School Quality Really Matter? An Examination of the Earnings-Quality Relationship," NBER Working Papers 5274, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  23. Behrman, Jere R & Birdsall, Nancy, 1983. "The Quality of Schooling: Quantity Alone is Misleading," American Economic Review, American Economic Association, vol. 73(5), pages 928-46, December. [Downloadable!] (restricted)
  24. Miller, Paul W & Mulvey, Charles & Martin, Nick, 1995. "What Do Twins Studies Reveal about the Economic Returns to Education? A Comparison of Australian and U.S. Findings," American Economic Review, American Economic Association, vol. 85(3), pages 586-99, June. [Downloadable!] (restricted)
  25. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January. [Downloadable!] (restricted)
  26. Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August. [Downloadable!] (restricted)
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