William Dickens wrote:
>
> >> But "controling for IQ" isn't warranted if years of schooling is
> >> endogenous. Kevin Lang has written extensively about these issues. -
> -
> >
> >Could you enlighten us?
>
> Honestly no. I've tried to find Kevin's 1993 paper on this and to
> reproduce his arguments, both to no avail. He has a neat little system
> that makes sense of the standard human capital wage equation and allows
> one to make simple sense of both discount rate and ability bias, but I
> can't remember how it works. Never paid too much attention to it
In any case, I can certainly see that OLS might not be the best way to
control for ability bias, but to think that ability bias is not BIG
seems crazy to me. It's as crazy as thinking that hours of football
practice is the main reason why pro players are better than me.
> because
> I strongly suspect that 1) people have almost no idea how much it will
> be worth for them to continue in school,
Gee, now you're sounding Austrian! "No idea"? Come on. Just look at
how parents groan when their kids talk about the low-earning majors like
sociology, and rejoice when they do CS and the like. There's certainly
some plausible guesstimating going on, though I agree it could be
improved if people knew the PDV formula and used Excel (as I make my
labor undergrads do).
> 2) most people's decisions
> about schooling have to do with how much they like it vs. how much they
> like whatever the alternative is (and are therefore fairly short
> sighted),
How much they like it is in turn heavily influenced by how good they are
at school - an indirect channel for ability bias.
At least my experience with school is that most college kids are looking
forward to $$$. They almost never compare current fun of school with
current fun of work.
3) 2) is heavily influenced by whether mom and dad are willing
> to pay for you to go to school (or someone else is), and
True, though it's not clear what the relevance is.
> 4) whether mom
> and dad are willing to pay depends on their own views about the return
> to education and their bequest motive and has nothing to do with any
> discount rate.
??? Isn't their "view of the return to education" a view about the
discount rate?
--
Prof. Bryan Caplan
Department of Economics George Mason University
http://www.bcaplan.com [EMAIL PROTECTED]
"I was so convinced that soon, very soon, by some
extraordinary circumstance I should suddenly become
the wealthiest and most distinguished person in the
world that I lived in constant tremulous expectation
of some magic good fortune befalling me. I was
always expecting that *it was about to begin* and I
on the point of attaining all that man could desire,
and I was forever hurrying from place to place,
believing that 'it' must be 'beginning' just where I
happened not to be."
Leo Tolstoy, *Youth*
