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Harmon, Colm
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Harmon, Colm
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Harmon, Colm
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Now showing 1 - 10 of 13
- PublicationThe marginal and average returns to schoolingThe existing literature now features many examples where log wages are linear in years of schooling and which effectively attempt to correct for least squares bias using instruments based essentially on a single variable. Two recent developments, taken together, cast some doubt on the downward bias in least squares estimates of the return to schooling that have been an important feature of the recent literature. The first is the realization that instrumental variable (IV) only estimate the effects of some treatment if the effect is the same for everyone. The second is that IV may only estimate the effect of the treatment on the individuals whose choices are affected by the instrument in question [extract]
803 - PublicationDoes education raise productivity, or just reflect it?(University College Dublin. School of Economics, 2003-01)
; ; ; It is clear that education has an important effect on wages paid in the labour market However it not clear whether this is due to the role that education plays in raising the productivity of workers (the human capital explanation) or whether education simply reflects the ability of the worker (through a signalling role). In this paper we describe and implement, using a variety of UK datasets, a number of tests from the existing literature for discriminating between the two explanations. We find little support for signalling ideas in these tests. However, we have severe reservations about these results because our doubts about the power of these tests and the appropriateness of the data. We propose an alternative test, based on the response of some individuals to a change in education incentives offered to other individuals caused by the changes in the minimum school leaving age in the seventies. Using this idea we find that data in the UK appears to strongly support the human capital explanation.2091 - PublicationThe impact of parental income and education on the health of their childrenThis paper investigates the robustness of recent findings on the effect of parental background on child health. We are particularly concerned with the extent to which their finding that income effects on child health are the result of spurious correlation rather than some causal mechanism. A similar argument can be made for the effect of education - if parental education and child health are correlated with some common unobservable (say, low parental time preference) then least squares estimates of the effect of parental education will be biased upwards. Moreover, it is very common for parental income data to be grouped, in which case income is measured with error and the coefficient on income will be biased towards zero and there are good reasons why the extent of bias may vary with child age. Fixed effect estimation is undermined by measurement error and here we adopt the traditional solution to both spurious correlation and measurement error and use an instrumental variables approach. Our results suggest that the income effects observed in the data are spurious.
311 - Publication
2770 - PublicationDispersion in the economic return to schooling(University College Dublin. School of Economics, 2001-08)
; ; In this paper we extend the standard human capital earnings function to include dispersion in the rate of return to schooling by treating the return as a random coefficient. One motivation is that if the increase in supply of skilled workers has been brought about by dipping further into the ability distribution. Alternatively if the expansion in post-compulsory education comes about through relaxed credit constraints then we might expect this to increase average ability in the pool of educated workers. Either event might lead to a rise in the variance in returns. Based on a sample of data from the United Kingdom our estimates suggest that neither the mean nor the dispersion in returns to schooling has altered significantly over time. This is consistent with educational expansion not leading to a disproportionate inflow of low ability individuals into the system.522 - PublicationThe impact of parental income and education on child health : further evidence for EnglandThis paper investigates the robustness of recent findings on the effect of parental education and income on child health. We are particularly concerned about spurious correlation arising from the potential endogeneity of parental income and education. Using an instrumental variables approach, our results suggest that the parental income and education effects are generally larger than are suggested by the correlations observed in the data. Moreover, we find strong support for the causal effect of income being large for the poor, but small at the average level of income.
978 - PublicationThe returns to education : a review of evidence, issues and deficiencies in the literature(University College Dublin. Institute for the Study of Social Change (Geary Institute), 2002-04-19)
; ; 618 - PublicationThe impact of parental income and education on the schooling of their children(University College Dublin. Geary Institute, 2010-07-01)
; ; ; This paper addresses the intergenerational transmission of education and investigates the extent to which early school leaving (at age 16) may be due to variations in parental background. An important contribution of the paper is to distinguish between the causal effects of parental income and parental education levels. Least squares estimation reveals conventional results – weak effects of income (when the child is 16), stronger effects of maternal education than paternal, and stronger effects on sons than daughters. We find that the education effects remain significant even when household income is included. However, when we use instrumental variable methods to simultaneously account for the endogeneity of parental education and paternal income, only maternal education remains significant (for daughters only) and becomes stronger. These estimates are consistent to various set of instruments. The impact of paternal income varies between specifications but become insignificant in our preferred specification. Our results provide limited evidence that policies alleviating income constraints at age 16 can alter schooling decisions but that policies increasing permanent income would lead to increased participation (especially for daughters). There is also evidence of intergenerational transmissions of education choice from mothers to daughters.1230