Estimating the Social Return to Higher Education: Evidence From Longitudinal and Repeated Cross-Sectional Data

Abstract

for many useful suggestions on this and an earlier draft. All errors are naturally my own. Financial support from the A. P. Sloan Dissertation Scholarship is gratefully acknowledged. The views expressed herein are those of the author and not necessarily those of the National Bureau of Economic Research.

The influence of area-level education on body mass index, waist circumference and obesity according to gender

“…In addition, people with higher education may be more likely to make positive lobbies for improvements in the area (Galea and Ahern 2005), such as trigger actions that make it safer, more walkable and with better physical structure. Econometric studies have also shown that regions with higher education may lead to an increase in the average income of the region (Moretti 2004). Finally, high levels of education are usually associated with the acquisition of knowledge and engagement in healthy behaviors, and the interaction of people with different levels of education may allow the sharing and dissemination of knowledge and skills with potential positive effect on the health of everyone.…”

Social returns to education in Italian local labor markets

“…The correlation between local human capital and wages does not need to be driven by externalities, as emphasized in Ciccone and Peri (2006) and Moretti (2003Moretti ( , 2004. Whenever workers with different levels of education are imperfect substitutes in production, the parameter η will pick up effects that can be driven both by "composition effects", due to a larger proportion of skilled workers on average productivity, and by genuine spillovers, due to human capital externalities.…”

“…This survey is conduced every 2 years by the Bank of Italy on a representative 5 The definition of LLM is crucial to identify human capital externalities and, in general, all kinds of agglomeration effects: see Rosenthal and Strange (2003). Duranton (2004) argues that the mixed conclusions on education externalities in the US may well depend on the territorial unit adopted, such as US States in Acemoglu and Angrist (2000), and MAs in Ciccone and Peri (2006), Moretti (2004), andRauch (1993). 6 According to Lucas (1988), the effects of average skill on the productivity of each worker have to do with "the ways various groups of people interact, which may be affected by political boundaries but are certainly an entirely different matter conceptually."…”

“…More recently, the literature has followed Lucas' (1988) suggestion that the ideal field for empirical research on human capital externalities should be local labor markets (LLMs). Rauch (1993), Acemoglu and Angrist (2000), Moretti (2004), Ciccone and Peri (2006) have estimated Mincerian wage-equations augmented with an average human capital term at the level of US State or metropolitan area (MA). But again, overall results are inconclusive: while Rauch (1993) and Moretti (2004) find evidence for substantial social returns to education, Acemoglu and Angrist (2000) and Ciccone and Peri (2006) claim that such returns are negligible.…”

“…To find some support about causality running from local human capital to wages, the paper performs a number of robustness checks. It shows that: (1) the estimated social returns are unlikely to be driven by spatially correlated omitted variables (Ciccone 2002); (2) they survive to the introduction of individual-and territorial-level controls; (3) they are not due to imperfect substitutability across workers (Ciccone and Peri 2006) or, (4) to selective migration of talented workers across LLMs (Charlot and Duranton 2004); (5) they survive when both local human capital and individual human capital are treated as endogenous variables and instrumented (Moretti 2004).…”