Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins

Orley Ashenfelter, Cecilia Rouse

NBER Working Paper No. 6106
Issued in July 1997
NBER Program(s):   CH   LS

We develop a model of optimal schooling investments and estimate it using new data on approximately 700 identical twins. We estimate an average return to schooling of 9 percent for identical twins, but estimated returns appear to be slightly higher for less able individuals. Simple cross-section estimates are marginally upward biased. These empirical results imply that more able individuals attain more schooling because they face lower marginal costs of schooling, not because of higher marginal benefits.

(557 K)

Published:

• Quarterly Journal of Economics, Vol. 113, no. 1 (February 1998): 253-284. ,
• Addison, John T. (ed.) Recent Developments in Labor Economics, Volume 1. Elgar Reference Collection. International Library of Critical Writings in Economics, vol. 207. Cheltenham, U.K. and Northampton, MA: Elgar, 2007

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