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Title: Estimating the Social Return to Higher Education: Evidence from Longitudinal and Repeated Cross-sectional Data
Resulting in 1 citation.
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Moretti, Enrico |
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Estimating the Social Return to Higher Education: Evidence from Longitudinal and Repeated Cross-sectional Data Journal of Econometrics 121,1-2 (July-August 2004): 175-212. Also: http://www.sciencedirect.com/science/article/pii/S0304407603002653 Cohort(s): NLSY79 Publisher: Elsevier Keyword(s): Census of Population; College Graduates; Data Linkage (also see Record Linkage); Education; Geocoded Data; Modeling, Instrumental Variables; Wage Rates Economists have speculated for at least a century that the social return to education may exceed the private return. In this paper, I estimate spillovers from college education by comparing wages for otherwise similar individuals who work in cities with different shares of college graduates in the labor force. A key issue in this comparison is the presence of unobservable characteristics of individuals and cities that may raise wages and be correlated with college share. I use longitudinal data to estimate a model of non-random selection of workers among cities. I account for unobservable city-specific demand shocks by using two instrumental variables: the (lagged) city demographic structure and the presence of a land-grant college. I find that a percentage point increase in the supply of college graduates raises high school drop-outs’ wages by 1.9%, high school graduates’ wages by 1.6%, and college graduates wages by 0.4%. The effect is larger for less educated groups, as predicted by a conventional demand and supply model. But even for college graduates, an increase in the supply of college graduates increases wages, as predicted by a model that includes conventional demand and supply factors as well as spillovers. |
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Bibliography Citation
Moretti, Enrico. "Estimating the Social Return to Higher Education: Evidence from Longitudinal and Repeated Cross-sectional Data." Journal of Econometrics 121,1-2 (July-August 2004): 175-212.
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