Measurement and Cross-Country Differences

Column 1 shows the coefcient on the dummy for

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Unformatted text preview: degree) are Type 2. Column (1) shows the coefficient on the dummy for assignment to Type 2 relative to Group 3. Column (2) shows the coefficient on the dummy for assignment to Type 1 (small high education) relative to Type 3 (large less educated). Column (3) shows this Type 1 versus 3 “effect” for the non-adoptees. In a each row, the effects in Columns (1) and (2) are estimated together with a single regression while Column (3) uses a separate regression. Column (4) shows the effect for the adoptees from a one standard deviation move in an index of shared family environment. This is calculated by taking the square root of the variance share explained by shared family environment in the previous table and multiplying by the standard deviation of the outcome variable: that is, R predicted effect on the outcome from a one standard deviation change in an index of family environment. Standard errors are corrected for within family correlation v vhat (1 cluster by family). QUARTERLY JOURNAL OF ECONOMICS Treatment effect “middle group” of families vs. large, less educated 146 TREATMENT EFFECTS Fortin – Econ 560 Lecture 5B b. Exogenous Variation Another strategy is to appeal to the same exogenous instruments that have been used to estimate the returns to schooling, namely compulsory schooling and parental income shocks. For example, Black, Devereux and Salvanes (2005) examine the effects of an increase in mandatory schooling from 7 years to 9 years, which was phased in across municipalities in Norway between 1959 and 1973. Using the timing of the law changes to instrument for parental education, they find weak (but not statistically significant) evidence of a causal relationship between exogenous increases in parental education and children’s outcomes. They do find, however, that among mothers with low levels of education, the mandated increase in education had a statistically significant effect on their children’s educational attainment. Fortin – Econ 560 Lecture 5B Oreopoulos, Page and Stevens (2006) exploit the larger variation in compulsory school law changes in t...
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