Compulsory Schooling and the Returns to Education: A Reexamination

van Huellen, Sophie; Qin, Duo

Abstract

We re-examine the effect of compulsory school law on education in the US pioneered by Angrist and Krueger (1991). We show that the standard instrumental variable approach of the education variable not only yields empirically inconsistent estimates, but is conceptually confused. The confusion arises from the rejection of the key causal variable as a valid conditional variable. By route of a causally explicit model design we are able to identify the circumstances under which the formerly rejected variable can yield valid inference values. Our investigation demonstrates the importance of building data-consistent models over estimator choice in successful research designs.

Citation

van Huellen, S., & Qin, D. Compulsory Schooling and the Returns to Education: A Reexamination

• Working Paper Type: Working Paper
• Deposit Date: Oct 22, 2016
• Publicly Available Date: Oct 22, 2016
• Series ISSN: 17535816
• Keywords: instrumental variables, randomisation, research design, returns to education, treatment effect