A Closer Look at the Effect of Education on Income: Angrist-Krueger Reconsidered

LF Hoogerheide

Research output: Contribution to journalArticleAcademic

Abstract

In this paper we reconsider the well-known paper of Angrist and Krueger (1991), who introduced a method to estimate the effect of education on income. The presence of latent capa¬bilities of individuals and measure¬ment errors complicate this estima¬tion, so that an ordinary regression is not reliable. First, we look at the approach and results of Angrist and Krueger (1991) for American data. Then, we take a closer look at these results: it appears that the reported estimate of a 10% increase in income per year of education is completely determined by data of a few Southern states. Given the large economic dif¬ferences between the regions of the US, the estimate may be far from representative for the average return on education across the US.
Original languageUndefined/Unknown
Pages (from-to)6-13
Number of pages8
JournalMedium Econometrische Toepassingen
Volume15
Issue number1
Publication statusPublished - 2007

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