Estimating the Returns to Education Using a Sample of Twins - The case of Japan -

Author Name NAKAMURO Makiko  (Tohoku University) /INUI Tomohiko  (Nihon University)
Creation Date/NO. December 2012 12-E-076
Research Project Research on Measuring Productivity in the Service Industries and Identifying the Driving Factors for Productivity Growth
Download / Links


The objective of this paper is to measure the causal effect of education on earnings using a sample of twins in Japan, with information collected through a web-based survey. The empirical results show that although the conventional OLS estimate is 10.0%, we obtain 9.3% as the estimated rate of return to education after the omitted ability bias and measurement errors in self-reported schooling were corrected. Our findings suggest that the conventional OLS estimate is not largely contaminated by potential biases.