2014

The Co-Twin Methodology and Returns to Schooling — Testing a Critical Assumption

Reprint No. 2014:4

Author(s): Örjan Sandewall, David Cesarini and Magnus JohannessonYear: 2014 Title: Labour Economics Volume (No.): 26 (January) Pages: 1–10
Preliminary version

The Co-Twin Methodology and Returns to Schooling — Testing a Critical Assumption Örjan Sandewall, David Cesarini and Magnus Johannesson


Twins-based estimates of the return to schooling have featured prominently in the economics of education literature. Their unbiasedness hinges critically on the assumption that within-pair variation in schooling is explained by factors unrelated to wage earning ability. This paper develops a framework for testing this assumption and shows, in a large sample of monozygotic twins, that the twins-based estimated return to schooling falls if adolescent IQ test scores are included in the wage equation. Using birth weight as an alternative proxy for ability yields qualitatively similar results. Our results thus cast doubt on the validity of twins-based estimates.


Reference:
Sandewall, Örjan, David Cesarini and Magnus Johannesson (2014), "The Co-Twin Methodology and Returns to Schooling — Testing a Critical Assumption". Labour Economics 26(January), 1–10.

Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

Sick of Inequality.jpg

In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?

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