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Activity Number:
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406
- New Methodologies and Modern Data Applications
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Type:
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Contributed
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Date/Time:
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Tuesday, July 30, 2019 : 2:00 PM to 3:50 PM
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Sponsor:
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Business and Economic Statistics Section
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Abstract #304373
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Presentation
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Title:
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Multidimensional Skills and the Returns to Schooling: Evidence from an Interactive Fixed Effects Approach and a Linked Survey-Administrative Dataset
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Author(s):
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Evan Totty* and Mohitosh Kejriwal and Xiaoxiao Li
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Companies:
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U.S. Census Bureau and Purdue University and Villanova University
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Keywords:
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Returns to schooling;
interactive fixed effects;
common correlated effects;
panel data;
administrative records;
multidimensional skills
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Abstract:
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This paper presents new evidence on returns to schooling based on an interactive fixed effects framework that allows for multiple unobserved skills with potentially time-varying prices as well as individual-level heterogeneity in returns. This constitutes a substantive generalization of most existing approaches. Our empirical analysis employs a unique linked survey-administrative panel dataset on education and earnings. We find average marginal returns to schooling of about 2.7 percent relative to least squares/instrumental variable estimates between 10.7-44.4 percent. Omitted ability accounts for a larger fraction of the aggregate least squares bias compared to heterogeneity. We also find considerable heterogeneity in individual returns.
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Authors who are presenting talks have a * after their name.
