Working Paper No. 806

The Co-twin Methodology and Returns to Schooling – Testing a Critical Assumption

Published: August 24, 2009Pages: 37Keywords: Returns to Schooling; Twins;, Equal Ability AssumptionJEL-codes: I21; J24
Published 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 feature prominently in the labor economics literature. The validity of such estimates hinges critically on the assumption that within-pair variation in schooling is explained by factors which are unrelated to wage earning ability. This paper develops a framework for testing this assumption, and finds, using a unique dataset of monozygotic twins, strong evidence against it. Di¤erences in adolescent IQ test scores predict within-pair variation in educational attainment, and including IQ in the wage equation causes within-pair point estimates for the returns to schooling to decline significantly. Our results thus cast doubt on the validity of estimates derived from the co-twin literature. 

An Agenda for Europe

Institutional Reform for Innovation and Entrepreneurship

Omslag 2017 Institutional Reform for Innovation and Entrepreneurship.jpg

The authors of this book, Niklas Elert, Magnus Henrekson and Mikael Stenkula, advise the economies of the European Union to become more entrepreneurial in promoting innovation and economic growth. The authors propose a reform strategy with respect to several aspects to achieve this goal.

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