returns to education: twin study

I had never heard of this study --

This paper uses a new survey to contrast the wages of genetically identical twins with different schooling levels. Multiple measurements of schooling levels were also collected to assess the effect of reporting error on the estimated economic returns to schooling. The data indicate that omitted ability variables do not bias the estimated return to schooling upward, but that measurement error does bias it downward. Adjustment for measurement error indicates that an additional year of schooling increases wages by 16%, a higher estimate of the economic returns to schooling than has been previously found.

Estimates of the Economic Returns to Schooling from a New Sample of Twins
Alan Krueger & Orley Ashenfelter

From the Princeton Weekly Bulletin:

One of Ashenfelter’s best-known areas of study is the relationship between education and income. Research into the impact of education had been complicated by the fact that many other factors, such as social class or innate intelligence, could contribute to someone’s earning power. Ashenfelter and Princeton colleague Alan Krueger found a way to bypass those factors through an unusual field study.

Beginning in 1991, the researchers traveled to the Twins Day Festival in Twinsburg, Ohio — which attracts thousands of twins each year, young and old — and interviewed more than 600 attendees over three years to collect data on their schooling and earnings. They were assisted by graduate students and, in one year, a pair of identical Princeton undergraduates.

Ashenfelter and Krueger, who also collaborated with Rouse on the study, found that each year of additional schooling equaled an additional 12 to 16 percent in earnings. Because the study compared genetically identical subjects, excluding other factors that were difficult to measure, it was widely considered the strongest analysis to date of the impact of education on earnings.

“What drove it was the fact that we realized there was a cheap and easy way to collect data,” said Ashenfelter, “and it was hysterically funny to go to a festival like that.”

Krueger said, “The twin study was great fun. What I took away from the experience is that Orley never treats research as finished. He thinks long and hard and deeply about economic problems. He also makes research fun. Our paper made a splash because we collected new data … and used simple as well as sophisticated econometric methods to answer a longstanding question in economics.”

Doing What Comes Naturally
by Eric Quiñones

Education Week:

[T]the twin who put in more school time tended almost always to be the higher-wage earner later in life. That was also true, subsequent studies by Mr. Krueger and others revealed, even when the difference in schooling time amounted to just a few months.

“If you look at the evidence at the individual level, it’s overwhelming,” said Barry P. Bosworth, a senior fellow at the Brookings Institution, a Washington think tank. “I’m far more inclined to say that it can be aggregated up to gains for society as a whole. But they don’t let economists run controlled laboratory experiments, so it’s hard to know for sure.”

Mr. Krueger agreed. “I think education matters in the long run,” he added. “In the short run, it’s the business cycle that matters.”

Researchers Gain Insight Into Education's Impact on Nations' Productivity
by Debra Viadero
Education Week April 23, 2008

Now that Goldin & Katz's book has been published, I would like to see Education Week simply assume that education has an "impact" on productivity.