I've occasionally heard that instrumental variables (IV) estimators of the return to education yield markedly higher estimates than OLS. Is this true? And how can this make any intuitive sense? If IV is correcting for endogeneity, you would expect things to go the other way. Why? With a medical treatment, you would expect endogeneity to understate the benefit, because sicker people are more likely to voluntarily seek treatment. But with education, you would expect endogeneity to overstate the benefit, because able people are more likely to voluntarily enroll. -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED]
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