Ability and rates of return to schooling—making use of the Swedish enlistment battery test

Abstract

The main objective of this paper is to estimate and compare the return to investments in education for men belonging to different parts of the ability distribution. Our ability measure is the achievement test score from the Swedish Military Enlistment Battery. By exploring the measurement error in the test score, i.e. the deviation from the true latent ability level of the individual, we try to predict the expected biases in the "ability specific" returns to education, when using an achievement test as a proxy for ability. We find that a higher score on the Swedish Enlistment test is associated with a higher return to schooling. The relationship between the return to schooling and the test score does however seem to be decreasing in the test score. Thus, it it primarily the ability specific return to schooling for the lower test groups that divert from the average return to schooling. In general, the measurement errors in the test score do not seem to bring about any major biases in the ability specific returns to schooling.

Education and health: evidence on adults with diabetes

“…Among these variables are: native ability (Heckman 2008; Nordin 2008); time preference, including at the time schooling choices are made (Cutler and Lleras-Muney 2010; Fuchs 1982); genetic factors (Jayachandran and Lleras-Muney 2009); poor health in early life which may be positively correlated with poor health in adulthood (Case et al 2002; Currie and Stabile 2003; Smith 2009) and also affect educational attainment in early life (Adams et al 2003; Case et al 2005; Oreopoulos et al 2008); low income in early life which similarly may affect educational attainment and independently health in later life (Adler and Rehkopf 2008). …”

The Distribution of Lifetime Earnings Returns to College

“…Some evidence suggests that returns to education vary with respect to cognitive ability. In two recent Swedish studies, Nordin (2008) and Öckert (2012) estimate heterogeneous returns relying on selection-onobservables assumptions. The former finds that the return to a year of schooling increases at a diminishing rate by level of cognitive ability, the latter that the return to college is increasing with respect to secondary school GPA.…”

Adult literacy, heterogeneity and returns to schooling in Chile

“…A model in which both the measure of skill and its interaction with schooling affect earnings and the skill-specific return to schooling is outlined below (Griliches 1977;Nordin 2008).…”

“…One should, however, keep in mind that both schooling and other skills are generated by the same latent ability. Therefore, one has to be aware of the joint causality between schooling and test scores (see Hansen, Heckman, and Mullen 2003;Nordin 2008). We use the International Adult Literacy Survey (IALS) data, which contain direct measures of adult literacy and numeracy skills which are workplace relevant.…”