TY  - JOUR
AU  - Carneiro,Pedro
AU  - Heckman,James J.
AU  - Vytlacil,Edward J.
TI  - Estimating Marginal Returns to Education
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16474
PY  - 2010
Y2  - October 2010
UR  - http://www.nber.org/papers/w16474
L1  - http://www.nber.org/papers/w16474.pdf
N1  - Author contact info:
Pedro Carneiro
Department of Economics
University College
Gower Street
London WC1E 6BT
United Kingdom
E-Mail: p.carneiro@ucl.ac.uk

James J. Heckman
Department of Economics
The University of Chicago
1126 E. 59th Street
Chicago, IL 60637
Tel: 773/702-0634
Fax: 773/702-8490
E-Mail: jjh@uchicago.edu

Edward J. Vytlacil
Department of Economics
New York University
19 West 4th Street, Sixth Floor
New York, NY 10012
Tel: 212/992-8682
Fax: 212/995-4186
E-Mail: vytlacil@nyu.edu
AB  - This paper estimates the marginal returns to college for individuals induced to enroll in college by different marginal policy changes. The recent instrumental variables literature seeks to estimate this parameter, but in general it does so only under strong assumptions that are tested and found wanting. We show how to utilize economic theory and local instrumental variables estimators to estimate the effect of marginal policy changes. Our empirical analysis shows that returns are higher for individuals with values of unobservables that make them more likely to attend college. We contrast the returns to well-defined marginal policy changes with IV estimates of the return to schooling. Some marginal policy changes inducing students into college produce very low returns.
ER  -