The efficacy of ability proxies for estimating the returns to schooling: A factor model‐based evaluation
能力代理变量估计教育回报的有效性：基于因子模型的评估
Summary A common approach to addressing ability bias is to augment the earnings‐schooling regression with proxies for cognitive and non‐cognitive skills. We evaluate this approach using a factor model framework, which allows consistent estimation of the returns to schooling without relying on proxies. The factor model estimators may be viewed as implicitly estimating proxy measurement error and/or accounting for omitted dimensions of ability. A bias decomposition quantifies…