Identifying the Role of Cognitive Ability in Explaining the Level of and Change in the Return to Schooling

James Heckman, Edward Vytlacil

NBER Working Paper No. 7820
Issued in August 2000
NBER Program(s):The Program on Children, The Labor Studies Program, The Public Economics Program

This paper considers two problems that arise in determining the role of ability in explaining the level of and change in the rate of return to schooling. (1) Ability and schooling are so strongly dependent that it is not possible, over a wide range of variation in schooling and ability, to independently vary these two variables and estimate their separate impacts. (2) The structure of panel data makes it difficult to identify main age and time effects or to isolate crucial education-ability-time interactions needed to assess the role of ability in explaining the rise in the return to education.

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Document Object Identifier (DOI): 10.3386/w7820

Published: Heckman, James and Edward Vytlacil. "Identifying The Role Of Cognitive Ability In Explaining The Level Of And Change In The Return To Schooling," Review of Economics and Statistics, 2001, v83(1,Feb), 1-12. citation courtesy of

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