TY - JOUR AU - Lemieux,Thomas AU - Card,David TI - Education, Earnings, and the "Canadian G.I. Bill" JF - National Bureau of Economic Research Working Paper Series VL - No. 6718 PY - 1998 Y2 - September 1998 UR - http://www.nber.org/papers/w6718 L1 - http://www.nber.org/papers/w6718.pdf N1 - Author contact info: Thomas Lemieux Department of Economics University of British Columbia #997-1873 East Mall Vancouver, BC V6T 1Z1 CANADA Tel: 604/822-2092 Fax: 604/822-5915 E-Mail: thomas.lemieux@ubc.ca David Card Department of Economics 549 Evans Hall, #3880 University of California, Berkeley Berkeley, CA 94720-3880 Tel: 510/642-5222 Fax: 510/643-7042 E-Mail: card@econ.berkeley.edu AB - We use the unique experiences of Canadian World War II veterans to identify the effects of a large scale college subsidy program on educational attainment and earnings. Like the United States, Canada set up an extensive veteran's assistance program that provided financial aid and institutional support for college attendance. Because of differences in military enlistment rates and education systems, however, a much lower fraction of Quebec men benefited from VRA benefits than men from other provinces. Building on this fact, we analyze inter-cohort patterns of education and earnings for English- speaking men from Ontario, using French-speaking men from Quebec as a control group. We use data from the 1971 and 1981 Canadian Censuses to compare conventional (OLS) estimates of the return to schooling with instrumental variables (IV) estimates that use potential eligibility for VRA benefits as an exogenous determinant of schooling. Consistent with the recent literature, we find that the IV estimates are typically as big or bigger than the corresponding OLS estimates. We also explore an alternative identification strategy that utilizes information on family background available in the 1973 Canadian Job Mobility Survey. We hypothesize that veterans from relatively disadvantaged family backgrounds were more likely to be affected by the VRA's incentives than veterans from wealthier families. Using the interaction of veteran status and family background as an instrument for schooling, we again find rates of return to education as large or larger than the corresponding OLS estimates. ER -