TY  - JOUR
AU  - Bound,John
AU  - Solon,Gary
TI  - Double Trouble: On the Value of Twins-Based Estimation of the Return to Schooling
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6721
PY  - 1998
Y2  - September 1998
UR  - http://www.nber.org/papers/w6721
L1  - http://www.nber.org/papers/w6721.pdf
N1  - Author contact info:
John Bound
Department of Economics
University of Michigan
Ann Arbor, MI 48109-1220
Tel: 734/998-7149
Fax: 734/998-7415
E-Mail: jbound@umich.edu

Gary Solon
Department of Economics
Michigan State University
East Lansing, MI 48824-1038
Tel: 517/353-9933
Fax: 517/432-1068
E-Mail: solon@msu.edu
AB  - Several recent studies use the schooling and wage variation between monozygotic twins to estimate the return to schooling. In this paper, we summarize the results from this literature, and we examine the implications of endogenous determination of which twin goes to school longer and of measuring schooling with (possibly mean-reverting) error.  Endogeneity of between-twins schooling variation is strongly suggested by the extensive (mostly non-economic) literature documenting that the between-twins difference in birth weight is correlated with the between-twins differences in both schooling and IQ.  We conclude that twins-based estimation is vulnerable to the same sort of inconsistency that afflicts conventional cross-sectional estimation.  We argue, however, that, if one starts with the presumption that endogenous schooling induces upward inconsistency in the estimated return to schooling, the new twins-based estimates may complement other approaches to tightening the upper bound on the return to schooling.
ER  -