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IFAU - Institute for Evaluation of Labour Market and Education Policy Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2003:13:
The effect of schooling and ability on achievement test scores

Karsten T Hansen (), James J Heckman and Kathleen J Mullen ()

Abstract: This paper develops two methods for estimating the effect of schooling on achievement test scores that control for endogeneity of schooling by postulating that both schooling and test scores are generated by a common unobserved latent ability. These methods are applied to data on schooling and test scores. Estimates from the two methods are in close agreement. We find that the effects of schooling on test scores are roughly linear across schooling levels. The effects of schooling on measured test scores are slightly larger for lower latent ability levels. We find that schooling increases the AFQT score on average between 2 and 4 percentage points, roughly twice as large as the effect claimed by Herrnstein and Murray (1994) but in agreement with estimates produced by Neal and Johnson (1996) and Winship and Korenman (1997). We extend the previous literature by estimating the impact of schooling on measured test scores at various quantiles of the latent ability distribution.

Keywords: Education; ability; latent variables; selection; MCMC; (follow links to similar papers)

JEL-Codes: C15; C35; I21; (follow links to similar papers)

71 pages, May 15, 2003

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This paper is published as:
Hansen, Karsten T, James J Heckman and Kathleen J Mullen, (2004), 'The effect of schooling and ability on achievement test scores', Journal of Econometrics, Vol. 121, No. 1-2, pages 39-98



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