Volume 28, Number 3 (Summer) 1993
Frazis, Harley. 1993. "Selection Bias and the Degree Effect." Journal of Human Resources 28(3):538-554.
This paper evaluates the evidence for a college degree effect-a particularly high return to completing college compared to the first three years-in the National Longitudinal Study of the High School Class of 1972 (NLS-72). An ordered probit model of schooling choice is developed to correct for selection bias. If conventional exclusion restrictions are adopted, selection bias does not appear to account for the degree effect. However, use of Leamer's (1978, 1982) extreme bounds analysis shows that the results are very dependent on acceptance of the exclusion restrictions used to identify the model.
Harley Frazis is an economist at the Office of Research and Evaluation, Bureau of Labor Statistics. The opinions expressed here are those of the author and do not reflect the views of the Bureau of Labor Statistics of those of other staff members. He wishes to thank W. Lee Hansen, Arthur Goldberger, Glen Cain, John Ruser, Anne Polivka, James Spletzer, Marshall Reinsdorf, and Mark Loewenstein. Paula Knepper kindly supplied her credit count data set and aided in its use and use of NLS-72 transcript data. Philip Case supplied research assistance. The data used in this article can be obtained beginning December 1993 through December 1996 from the author at Bureau of Labor Statistics, Room 4915 PSB,2 Massachusetts Ave. NE, Washington DC 20212-0001.
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