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Biases in Twin Estimates of the Return to Schooling: A Note on Recent Research

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  • David Neumark

Abstract

Ashenfelter and Krueger's (1993) within-twin, measurement-error- corrected estimate of the return to schooling is about 13-16 percent. If their estimate is unbiased, then their results imply considerable downward measurement error bias in uncorrected within-twin estimates of the return to schooling, and considerable downward omitted ability bias in cross-section estimates. This note points out that if there are ability differences among twins, then AK's IV estimator exacerbates the omitted ability bias in the within-twin estimate. Thus, upward omitted ability bias in within-twin estimates may provide an alternative explanation of the surprisingly high estimates of the return to schooling that AK obtain, and permit their results to be reconciled with upward, rather than downward omitted ability bias in cross-section estimates.

Suggested Citation

  • David Neumark, 1994. "Biases in Twin Estimates of the Return to Schooling: A Note on Recent Research," NBER Technical Working Papers 0158, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberte:0158
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    1. Griliches, Zvi, 1979. "Sibling Models and Data in Economics: Beginnings of a Survey," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 37-64, October.
    2. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, vol. 84(5), pages 1157-1173, December.
    3. Behrman, Jere R & Rosenzweig, Mark R & Taubman, Paul, 1994. "Endowments and the Allocation of Schooling in the Family and in the Marriage Market: The Twins Experiment," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1131-1174, December.
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    Cited by:

    1. Pronzato, Chiara, 2008. "Why educated mothers don’t make educated children? A statistical study in the intergenerational transmission of schooling," ISER Working Paper Series 2008-11, Institute for Social and Economic Research.
    2. Chiara Pronzato, 2012. "An examination of paternal and maternal intergenerational transmission of schooling," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 591-608, January.
    3. William N. Evans & Edward Montgomery, 1994. "Education and Health: Where There's Smoke There's an Instrument," NBER Working Papers 4949, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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