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Estimating the education-earnings equation using geographic variation

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  • Doyle, William R.
  • Skinner, Benjamin T.

Abstract

We expand on the literature on the causal impact of postsecondary education on earnings by introducing a richer set of location-based measures as instruments for years of education. Utilizing data from the National Longitudinal Study of Youth, 1997, we implement six different sets of instruments based on geographic variation: presence of a four-year or two-year college in the county, inverse log distance to in-state two-year colleges, distance-weighted tuition and distance-weighted enrollment at in-state two-year colleges, and inverse log distance to all colleges. We find that these alternative measures yield differing estimates of the impact of educational attainment on earnings. Using our preferred measure of geographic variation, one additional year of postsecondary attainment results in a 9.7% increase in yearly earnings. We find a larger impact of postsecondary attainment for women, and no measurable impact of postsecondary attainment for men.

Suggested Citation

  • Doyle, William R. & Skinner, Benjamin T., 2016. "Estimating the education-earnings equation using geographic variation," Economics of Education Review, Elsevier, vol. 53(C), pages 254-267.
    • Handle: RePEc:eee:ecoedu:v:53:y:2016:i:c:p:254-267
    DOI: 10.1016/j.econedurev.2016.03.010
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    3. Benjamin Skinner & Taylor Burtch & Hazel Levy, 2024. "Variation in Broadband Access Among Undergraduate Populations Across the United States," Research in Higher Education, Springer;Association for Institutional Research, vol. 65(5), pages 827-870, August.
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    7. Mikołaj Czajkowski & Tomasz Gajderowicz & Marek Giergiczny & Gabriela Grotkowska & Urszula Sztandar-Sztanderska, 2020. "Choosing the Future: Economic Preferences for Higher Education Using Discrete Choice Experiment Method," Research in Higher Education, Springer;Association for Institutional Research, vol. 61(4), pages 510-539, June.
    8. Taylor Delaney, 2024. "2-Year or Not 2-Year? The Impact of Starting at Community College on Bachelor’s Degree Attainment," Research in Higher Education, Springer;Association for Institutional Research, vol. 65(8), pages 1717-1746, December.
    9. Benjamin T. Skinner, 2019. "Choosing College in the 2000s: An Updated Analysis Using the Conditional Logistic Choice Model," Research in Higher Education, Springer;Association for Institutional Research, vol. 60(2), pages 153-183, March.
    10. Acton, Riley & Cortes, Kalena E. & Morales, Camila, 2024. "Distance to Opportunity: Higher Education Deserts and College Enrollment Choices," IZA Discussion Papers 17394, Institute of Labor Economics (IZA).
    11. Acton, Riley & Cortes, Kalena E. & Miller, Lois & Morales, Camila, 2024. "Distance to Degrees: How College Proximity Shapes Students' Enrollment Choices and Attainment across Race-Ethnicity and Socioeconomic Status," IZA Discussion Papers 17338, Institute of Labor Economics (IZA).
    12. Daniel Hummel, 2020. "The effects of population and housing density in urban areas on income in the United States," Local Economy, London South Bank University, vol. 35(1), pages 27-47, February.
    13. Baird Matthew D. & Bozick Robert & Zaber Melanie A., 2022. "Beyond traditional academic degrees: The labor market returns to occupational credentials in the United States," IZA Journal of Labor Economics, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 11(1), pages 1-38, January.
    14. Chen, Qihui, 2020. "Am I Late for School? Peer Effects on Delayed School Entry in Rural Northwestern China," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304415, Agricultural and Applied Economics Association.

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