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Title: Estimating the Returns to College Quality with Multiple Proxies for Quality
Resulting in 1 citation.
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Black, Dan A. Smith, Jeffrey A. |
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Estimating the Returns to College Quality with Multiple Proxies for Quality Working Paper, Center for Policy Research-Syracuse University and Department of Economics, University of Maryland, February 2005 Cohort(s): NLSY79 Publisher: Department of Economics, University of Maryland Keyword(s): Armed Services Vocational Aptitude Battery (ASVAB); College Characteristics; College Graduates; Colleges; Gender Differences; Test Scores/Test theory/IRT Permission to reprint the abstract has not been received from the publisher. Existing studies of the effects of college quality on earnings typically rely on a single proxy variable for college quality. This study questions the wisdom of this approach given that a single proxy likely measures college quality with substantial error. We begin by considering the parameter of interest and its relation to the parameter estimated in the literature; this analysis reveals the potential for substantial bias. We then consider three econometric approaches to the problem that involve the use of multiple proxies for college quality: combining the multiple proxies via factor analysis, using the additional proxies as instruments, and a GMM estimator derived from a structural measurement error model that generalizes the classical measurement error model. Our estimates suggest that the existing literature understates the wage effects of college quality. |
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Bibliography Citation
Black, Dan A. and Jeffrey A. Smith. "Estimating the Returns to College Quality with Multiple Proxies for Quality." Working Paper, Center for Policy Research-Syracuse University and Department of Economics, University of Maryland, February 2005. |