Using Geographic Variation in College Proximity to Estimate the Return to Schooling

David Card

NBER Working Paper No. 4483
Issued in October 1993
NBER Program(s):   LS

A convincing analysis of the causal link between schooling and earnings requires an exogenous source of variation in education outcomes. This paper explores the use of college proximity as an exogenous determinant of schooling. Analysis of the NLS Young Men Cohort reveals that men who grew up in local labor markets with a nearby college have significantly higher education and earnings than other men. The education and earnings gains are concentrated among men with poorly-educated parents -- men who would otherwise stop schooling at relatively low levels. When college proximity is taken as an exogenous determinant of schooling the implied instrumental variables estimates of the return to schooling are 25-60% higher than conventional ordinary least squares estimates. Since the effect of a nearby college on schooling attainment varies by family background it is possible to test whether college proximity is a legitimately exogenous determinant of schooling. The results affirm that marginal returns to education among children of less-educated parents are as high and perhaps much higher than the rates of return estimated by conventional methods.

download in pdf format
   (1401 K)

download in djvu format
   (299 K)

email paper

This paper is available as PDF (1401 K) or DjVu (299 K) (Download viewer) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w4483

Published: Aspects of Labour Economics: Essays in Honour of John Vanderkamp, edited by Louis Christofides, E. Kenneth Grant and Robert Swindinsky. University of Toronto Press, 1995

Users who downloaded this paper also downloaded these:
Angrist and Lavy w6781 Does Teacher Training Affect Pupil Learning? Evidence from Matched Comparisons in Jerusalem Public Schools
Angrist and Krueger w8456 Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments
Card w7769 Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems
Card w4832 Earnings, Schooling, and Ability Revisited
Kling w7989 Interpreting Instrumental Variables Estimates of the Returns to Schooling
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us