American Economic Review: Vol. 104 No. 6 (June 2014)

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Compulsory Education and the Benefits of Schooling

Article Citation

Stephens, Melvin Jr. , and Dou-Yan Yang. 2014. "Compulsory Education and the Benefits of Schooling." American Economic Review, 104(6): 1777-92.

DOI: 10.1257/aer.104.6.1777

Abstract

Causal estimates of the benefits of increased schooling using U.S. state schooling laws as instruments typically rely on specifications which assume common trends across states in the factors affecting different birth cohorts. Differential changes across states during this period, such as relative school quality improvements, suggest that this assumption may fail to hold. Across a number of outcomes including wages, unemployment, and divorce, we find that statistically significant causal estimates become insignificant and, in many instances, wrong-signed when allowing year of birth effects to vary across regions.

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Authors

Stephens, Melvin Jr. (U MI)
Yang, Dou-Yan (Carnegie Mellon U)

JEL Classifications

H75: State and Local Government: Health; Education; Welfare; Public Pensions
I21: Analysis of Education
I28: Education: Government Policy
J24: Human Capital; Skills; Occupational Choice; Labor Productivity
N31: Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: U.S.; Canada: Pre-1913
N32: Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: U.S.; Canada: 1913-


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