Ruhr Economic Papers

Ruhr Economic Papers #591

Heterogeneity in Marginal Non-Monetary Returns to Higher Education

by Daniel A. Kamhöfer, Hendrik Schmitz and Matthias Westphal

RGS, UDE, 11/2015, 45 S./p., 10 Euro, ISBN 978-3-86788-686-4 DOI: 10.4419/86788686

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Abstract

In this paper we estimate the effects of college education on cognitive abilities and health exploiting exogenous variation in college availability and student loan regulations. By means of semiparametric local instrumental variables techniques we estimate marginal treatment effects in an environment of essential heterogeneity. The results suggest heterogeneous but always positive effects on cognitive skills and homogeneously positive effects for all health outcomes but mental health, where the effects are around zero throughout. We find that likely mechanisms of positive physical health returns are eff ects of college education on physically demanding activities on the job and health behavior such as smoking and drinking while mentally more demanding jobs might explain the skill returns.

JEL-Classification: C31, H52, I12, I21

Keywords: Returns to higher education; cognitive abilities; health; marginal treatment eff ect

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