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Partial Identification and Bound Estimation of the Average Treatment Effect of Education on Earnings for South Africa
Author(s) -
Mariotti Martine,
Meinecke Juergen
Publication year - 2015
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/obes.12059
Subject(s) - earnings , estimation , selection (genetic algorithm) , demographic economics , identification (biology) , economics , cohort , parametric statistics , econometrics , statistics , mathematics , finance , computer science , biology , botany , management , artificial intelligence
We partially identify the average treatment effect of education on earnings and non‐parametrically estimate its upper bound for African, Coloured (mixed race) and White males in South Africa. We address endogenous selection into education, cohort effects and endogenous selection into work. Using the September 2007 South African Labour Force Survey, the upper bound estimates are considerably lower than existing parametric point estimates of the return to education. As a lesson, policy makers should focus less on increasing the amount of education obtained by Africans and Coloureds, but rather on measures that can grow the return to existing levels of education.