The Institute for Education and Social Policy (IESP) Working Paper series facilitates awareness and exchange of quality research among the policy community. Empirical research papers and research-based policy papers focusing on topics germane to IESP's research areas will be posted to stimulate comments and to make research results quickly available. Papers accepted to the series are typically pre-publication manuscripts that have not been published elsewhere.
A Day at the Museum: The Impact of Field Trips to Informal Science Education Institutions on Middle School Science Achievement
Emilyn Ruble Whitesell
Working Paper #03-15
Field trips are a common feature of public education in the United States, but there is little research on the effect of field trips on student achievement. Using six years of student-level data from a large-scale program in New York City (approximately 200 schools per year), the author estimates the impact of field trip exposure on students’ performance on New York State’s standardized eighth-grade science exam. Using school fixed effects to capitalize on variation in field trip participation within schools over time, the author finds small positive effects of exposure to field trips on science test scores and proficiency. These results are important for policy, as they demonstrate that enrichment and informal learning experiences can contribute positively to student achievement.
The Effect of Breakfast in the Classroom on Obesity and Academic Performance: Evidence from New York City
Sean P. Corcoran, Brian Elbel and Amy Ellen Schwartz
Working Paper #02-15
Participation in the federally-subsidized school breakfast program often falls well below its lunchtime counterpart. To increase take-up, many districts have implemented Breakfast in the Classroom (BIC), offering breakfast directly to students at the start of the school day. Beyond increasing participation, advocates claim BIC improves academic performance, attendance, and engagement. Others caution BIC has deleterious effects on child weight. We use the implementation of BIC in NYC to estimate its impact on meals program participation, BMI, achievement, and attendance. While we find large effects on participation, our findings provide no evidence of hoped-for gains in academic performance, nor of feared increases in obesity. The policy case for BIC will depend upon reductions in hunger and food insecurity for disadvantaged children, or its longer-term effects.
Making Summer Matter: The Impact of Youth Employment on Academic Performance
Amy Ellen Schwartz, Jacob Leos- Urbel, and Matt Wiswall
Working Paper #04-15
Holding a summer job is a rite of passage in American adolescence, a first rung towards adulthood and self-sufficiency. Summer youth employment has the potential to benefit high school students’ educational outcomes and employment trajectories, especially for low-income youth. This paper examines New York City’s Summer Youth Employment Program (SYEP). SYEP provides jobs to youth ages 14-24, and due to high demand for summer jobs, allocates slots through a random lottery system. The authors match student-level data from the SYEP program with educational records from the NYC Department of Education, and use the random lottery to estimate the effects of SYEP participation on a number of academic outcomes, including test taking and performance. The authors find that SYEP participation has positive impacts on student academic outcomes, and these effects are particularly large for students who participate in SYEP multiple times. These findings suggest substantial heterogeneity in program effects, and an important avenue for policy makers to target the program to those who might benefit from it the most.
Moving Matters: The Causal Effect of Moving Schools on Student Performance
Amy Ellen Schwartz, Leanna Stiefel and Sarah A. Cordes
Working Paper #01-15 (March)
The majority of existing research on mobility indicates that students do worse in the year of a school move. This research, however, has been unsuccessful in isolating the causal effects of mobility and often fails to distinguish the heterogeneous impacts of moves, conflating structural moves (mandated by a school’s terminal grade) and non-structural moves (induced by residential mobility or by access to a better school) for example. Moreover, there is little evidence on the effects beyond the first year of a move. In this paper, the authors obtain credibly causal estimates of the impact of mobility on performance in both the short and long run, addressing heterogeneity in the impacts of mobility and the endogeneity of moving. The authors do so using richly detailed longitudinal data for five cohorts of New York City public school students making standard academic progress from grades 1-8. They estimate the impact of moving to a new school in a model with student fixed effects and two alternative sets of instrumental variables -- the grade span of a student’s first grade school and foreclosure/building sale -- to isolate the causal effect of mobility that is likely planned and mobility that is likely due to unanticipated shocks, respectively. They find negative short-term as well as long-term effects of the structural moves built into the school system. Non-structural moves, however, have a positive effect on academic performance if they are made to join a new school at the beginning of that school’s grade span and, thus, more likely made for strategic reasons. Robustness checks indicate results are not sensitive to inclusion of school quality measures, pre-move trends in mobility, or alternative samples. In the conclusions, the authors discuss the importance of findings on the heterogeneous impact of school moves to the literature and to policy makers.
Pathways to an Elite Education: Application, Admission, and Matriculation to New York City’s Specialized High Schools
Sean P. Corcoran and Christine Baker-Smith
Working Paper with The Research Alliance for New York City Schools
New York City’s elite public specialized high schools have a long history of offering a rigorous college preparatory education to the City’s most academically talented students. Though immensely popular and highly selective, their policy of admitting students on the basis of a single entrance exam has been heavily criticized. Many argue, for example, that the policy inhibits diversity at the schools, which are predominately Asian, White, and male. In this paper, the authors provide a descriptive analysis of the “pipeline” from middle school to matriculation at a specialized high school, identifying group-level differences in rates of application, admission, and enrollment unexplained by measures of prior achievement. These differences serve to highlight points of intervention to improve access for under-represented groups. The authors also look at the role of middle schools in the pipeline, examining the distribution of offers across middle schools and testing for middle school effects on application and admission. Finally, they simulate the effects of alternative admissions rules on the composition of students at the specialized high schools.
Rolling Out and Scaling Up: What Happens When a New Program Is No Longer New?
Meryle Weinstein and Emilyn Ruble Whitesell
Working Paper #05-15
In this study, the authors use data from the New York City Department of Education to better understand the impact of long-standing science program serving middle school students. Urban Advantage was first introduced in 2005 as an innovative way to improve science achievement and in 2015 has now has become institutionalized in many New York City public schools. This paper explores the changes in the program and participants over time and address multiple types of heterogeneity in the impact of UA. The analysis uses ten years of data to determine how middle schools’ participation in UA affects student performance on the eighth-grade science exam. Results from this study provide evidence about the ongoing efficacy of UA, and more broadly provide insight into how program effects can change as programs become institutionalized in school districts’ approach to education. The authors consistently find small-to-moderate positive effects of attending a UA school on students’ science performance after the school’s first year of participation. In the subgroup analyses that explore heterogeneity in the UA effect based on student characteristics, the authors find very positive effects for all student subgroups. Effects are particularly large for Hispanic and black students. Finally, analysis of repeated student exposure suggests that the effects are driven by students who attend UA schools in both seventh and eighth grade. The findings of this study indicate that UA is having a positive impact for all the groups we analyzed, but it is especially effective for high-need schools and students. From a policy and program standpoint, this suggests UA should target the highest-need schools, potentially recruiting struggling non-UA schools directly and working to expand within active UA schools.
Do Charter Schools Ruin Local Public Schools in Poor Neighborhoods? Evidence from New York City
Sarah A. Cordes
Working Paper #02-14
Charter schools and school choice are popular reforms believed to improve student performance largely through market competition, increased innovation, or some combination of the two mechanisms. Opponents of school choice argue that such reforms sap needed funds and resources from the traditional public school system. Despite this claim, there has been little or no research examining the impact of charter schools on the resources of surrounding public schools. Given recent policies such as Race to the Top that encourage the proliferation of charter schools, it is important to understand the impact that charter schools have on the level and distribution of resources in traditional neighborhood public schools. Using data on New York City Public Schools for the period 1997-2010, this paper seeks to answer the question: What impact do charter schools have on neighborhood public school resources? As a supplemental analysis, the author further probes her results by answering the question: What potential mechanisms explain these effects, if any? Findings indicate that charter schools lead to average increases in financial resources including total and instructional spending per pupil, with small or insignificant changes in nonfinancial resources such as the percent of teachers with master’s degrees, the percent of teachers with more than two years of experience in their current school, and pupil-teacher ratios. These findings are robust to several different measures of charter school competition, definitions of neighborhood, and model specifications. Exploration of mechanisms reveals that increased per pupil expenditures may be due, in part, to decreasing enrollments of general education students and higher concentrations of both free lunch eligible and special education students in neighborhood public schools following charter school entry. On net, charter schools appear to have no significant negative effects on public school resources as measured by expenditures, although some schools that serve larger shares of lower cost (i.e. general education and immigrant) may experience decreased spending. These findings are consistent with a theory where charter schools act as profit maximizers that compete with public schools for students, particularly those students who are easiest and least costly to educate.
Making Summer Matter: The Impact of Youth Employment on Academic Performance
Amy Ellen Schwartz, Jacob Leos- Urbel, Megan Silander and Matt Wiswall
Working Paper #03-14
Holding a summer job is a rite of passage in American adolescence, a first rung towards adulthood and self-sufficiency. However, over the past decade, youth employment during the summer has decreased significantly. Summer youth employment has the potential to benefit high school students’ educational outcomes and employment trajectories, especially for low-income youth. Despite the potential importance of youth employment during summer, evidence of the impact of summer jobs on youth outcomes is limited to only a few studies. This research examines summer youth employment, beginning with academic outcomes, by studying New York City’s Summer Youth Employment Program (SYEP). SYEP provides jobs to youth ages 14-24, and due to high demand for summer jobs, allocates slots through a random lottery system, allowing for causal estimates of program impact. The present study uses student-level data from the New York City Department of Youth and Community Development (the SYEP administrating agency) and New York City Department of Education, encompassing approximately 300,000 student SYEP applicants for the 2005-2009 program years. This paper examines the impact of SYEP on a wider range of academic performance outcomes, including test taking, passing rates and scores. It also attends to variation in these outcomes. Findings suggest that SYEP has positive impacts on some student academic outcomes, and that these effects are heterogeneous. Future analyses will focus on examining program, student and school characteristics that might explain these variations.
Successful Schools How School-Level Factors Influence Success with Urban Advantage
Meryle Weinstein, Emilyn Ruble Whitesell and Michele Leardo
Working Paper #01-14
Informal science education institutions have been identified as critical participants in helping students succeed in science by working in collaboration with school systems across the country. The results of one such collaboration, the Urban Advantage (UA) program found that participation in UA improved student achievement, on average, by 0.6 standard deviations on the 8 th grade New York State Intermediate Level Science exam. However, while some UA schools performed exceedingly well, others performed well below expectations. In the current study, the authors explore the heterogeneity in the results and look deeper into what may be the cause of this variation, focusing closely on the school-level factors that may help or hinder success. After identifying a set of high and low-performing UA schools, they use qualitative research methods to uncover the ways in which successful schools are implementing UA, as well as other schoollevel factors that may influence the degree to which the school is able to benefit from the UA program. Identifying these best practices across different school contexts may help UA program staff develop strategies to support UA schools having more limited success. Additionally, findings from this study may aid UA staff in the school selection process, for example choosing schools they previously may not have based on their school-level characteristics.
High Stakes in the Classroom, High Stakes on the Street: The Effects of Community Violence on Students’ Standardized Test Performance
Patrick Sharkey, Amy Ellen Schwartz, Ingrid Gould Ellen and Johanna Lacoe
Working Paper #03-13
This paper examines the effect of exposure to violent crime on students’ standardized test performance among a sample of students in New York City public schools. To identify the effect of exposure to community violence on children’s test scores, the authors compare students exposed to an incident of violent crime on their own blockface in the week prior to the exam to students exposed in the week after the exam. The results show that such exposure to violent crime reduces performance on English Language Arts assessments, and no effect on Math scores. The effect of exposure to violent crime is most pronounced among African Americans, and reduces the passing rates of black students by approximately 3 percentage points.
Museums, Zoos, and Gardens: How Formal-Informal Partnerships Can Impact Urban Students’ Performance
Meryle Weinstein, Emilyn Ruble Whitesell and Amy Ellen Schwartz
Working Paper #04-13
In this paper the authors provide the first rigorous evidence of the impact of a partnership between public middle schools and informal science institutions (ISIs), such as museums and zoos, on student outcomes. This study focuses on Urban Advantage (UA), a program in New York City (NYC) that explicitly draws upon the expertise and resources of the city’s ISIs, bringing these institutions together with NYC public schools to improve science education through intensive professional development, access to ISIs for teachers and students, and other science resources. The authors conclude that attending a UA school in eighth grade increases middle school science achievement, and there is some evidence that it may also increase the likelihood of passing standardized science exams in high school.
Too Scared to Learn? The Academic Consequences of Feeling Unsafe at School
Working Paper #02-13
A safe environment is a prerequisite for productive learning. This paper represents the first large-scale analysis of how feelings of safety at school affect educational outcomes. Using a unique longitudinal dataset of survey responses from New York City middle school students, the paper provides insight into the causal relationship between feelings of safety and academic achievement. The survey data include the reported feelings of safety for more than 340,000 students annually from 2007-2010 in over 700 middle schools. Findings show consistent negative effects of feeling unsafe on test scores. The paper explores the mechanisms through which feeling unsafe in the classroom may impact test scores, and multiple robustness checks support the validity of the causal claim.
Unequally Safe: The Race Gap in School Safety
Working Paper #01-13
Inequality in educational outcomes is a frequent topic of policy debate. This paper investigates one potential source of educational inequality – school safety. With panel survey data of middle school students, this paper estimates racial gaps in student feelings of safety in the classroom, in the hallways, and outside the school building, and how frequently students miss school due to safety concerns. The results identify gaps in feelings of safety between black students, Hispanic students, and their white and Asian peers, even within the same schools and homerooms. Multilevel modeling and decomposition analyses are used to identify key contextual characteristics of schools – school disorder, discipline and security policies, and racial and ethnic tension – that relate to racial and ethnic inequality in feelings of safety.
Can Formal-Informal Collaborations Improve Science Literacy in Urban Middle Schools? The Urban Advantage Middle School Science Initiative in New York City
Meryle Weinstein, Emilyn Ruble Whitesell and Amy Ellen Schwartz
Working Paper #06-12
Informal science education institutions have been identified as critical partners as they seek to support the science efforts of school systems that have increasingly focused their attention on reading/language arts and math. The current study reports on the findings of the evaluation of Urban Advantage, a partnership program designed to improve middle school students’ understanding of scientific inquiry through collaborations between the New York City Department of Education (NYCDOE) and eight informal science education institutions in New York City (NYC). The program is focused on enhancing the science content knowledge of middle school science teachers and addressing the academic needs of middle school students by creating opportunities for them to learn science using the resources and expertise of NYC’s science rich cultural institutions. The authors examine whether the Urban Advantage (UA) program has led to increased student achievement on the New York State 8th grade Intermediate Level Science (ILS) assessment for participating schools and students and on early high school outcomes, such as attending a Science, Technology, Engineering, or Mathematics (STEM) high school or taking a science Regents exam in 8th or 9th grade. This study is one of the few to estimate the impact of a formal-informal science program on academic achievement. The authors find that controlling for performance of students in the year prior to joining UA, students at UA schools, on average, do at least 0.041 standard deviations better than students at non-UA schools, while no significant differences are found for either ELA or math. Additionally, the results from the linear probability models find that UA also contributes to post- 8 th grade outcomes, including the probability of attending a STEM high school and taking and passing a high school science Regents exam.
The Impact of the Great Recession on School District Finances: Evidence from New York
Rajashri Chakrabarti and Elizabeth Setren
Working Paper #03-12
There is a slowly emerging literature that seeks to understand how the Great Recession affected other parts of the economy; however, there is no research that examines the effect of Great Recession (or any other recession) on schools. Given the fundamental role of education in human capital formation and growth, it is essential to understand the effect of recessions on schools. This paper starts to fill this gap. Exploiting detailed data on a multitude of school finance indicators and a trend shift analysis, it examines how the Great Recession affected school funding in NY. While we find no evidence of effects on either total revenue or expenditure, there were important compositional changes to both. There is strong evidence of substitution of funds on the revenue side---the infusion of funds with the federal stimulus occurred simultaneously with statistically and economically significant cuts in state and local financing, especially the former. On the expenditure side, instructional expenditure was maintained, while several non-instruction categories like transportation, student activities and utilities suffered. Important heterogeneities in experiences are also observed by poverty, metro areas, size, and urban status. Affluent districts were hurt the most, while analysis by metro areas reveal that the NYC metropolitan area, and especially Nassau, sustained largest losses. The findings of this study promise to facilitate our understanding of how recessions affect schools and the role policy can play to mitigate the consequences.
Precarious Slopes? The Great Recession, Federal Stimulus, and New Jersey Schools
Rajashri Chakrabarti and Sarah Sutherland
Working Paper #02-12
While sparse literature exists investigating the impact of the Great Recession on various sectors of the economy, there is virtually no research that studies the effect of the Great Recession, or past recessions, on schools. This paper starts to fill the void. Studying school funding during the recession is of paramount importance because schools have a fundamental role in fostering human capital formation and economic growth. The authors exploit unique panel data and trend shift analysis to analyze how New Jersey school finances were affected during the Great Recession and the ARRA federal stimulus period. Their results show strong evidence of downward shifts in both revenue and expenditure following the recession. Federal stimulus seemed to have helped in 2010, however both revenue and expenditure still declined. While total revenue declined, the various components of revenue did not witness symmetric changes. The infusion of funds with the federal stimulus occurred simultaneously with statistically and economically significant cuts in state and local financing, especially the former. Their results also show a compositional shift in expenditures in favor of categories that are linked most closely to instruction, while several noninstruction categories including transportation and utilities declined. Interestingly, budgetary stress seems to have led to significant lay-offs for untenured teachers, leading to a rightward shift of the teacher salary and experience distributions. Heterogeneity analysis shows that high poverty and urban districts sustained the largest falls in the post-recession era, with Abbott districts specifically falling the furthest from pre-recession trends. Of importance, the Abbott districts were the only group in our expansive analysis to show statistically significant negative shifts in instructional expenditure even with the federal stimulus. The findings of this paper contribute valuable insight regarding schools’ financial situations during recession and can serve as a guide to aid future policy decisions.
Does Small High School Reform Lift Urban Districts? Evidence from New York City
Leanna Stiefel, Matthew Wiswall, Amy Ellen Schwartz and Elizabeth Debraggio
Working Paper #04-12
While numerous policy interventions have been aimed at improving high school outcomes for urban students, “small school reform” (in which large comprehensive high schools are replaced by newly created small schools) is of particular interest for three reasons: first, because it has been adopted in key American cities including New York City, Los Angeles, Chicago, Philadelphia, Oakland, San Diego, and Boston; second because it enjoyed a substantial public and philanthropic funding base, including nearly $600 million each from the Gates foundation and US Department of Education;1 third -- and perhaps most tantalizing -- because recent research evaluating the new schools in New York City (Bloom et al., 2010 and Schwartz, Stiefel, and Wiswall, 2012) and Chicago (Barrow et al., 2010) suggests that that students attending new small schools achieve better outcomes (including higher graduation rates) than other district schools. Although additional work is needed to externally validate these latter results in other cities, the findings provide only part of the evidence needed to answer to the question we pose in this paper – does the introduction of new small schools (and the corresponding changes in other schools) improve outcomes district-wide?
Do Small Schools Improve Performance in Large, Urban Districts? Causal Evidence from New York City
Amy Ellen Schwartz, Leanna Stiefel and Matthew Wiswall
Working Paper #01-12
The authors evaluate the effectiveness of small high school reform in the country’s largest school district, New York City. Using a rich administrative dataset for multiple cohorts of students and distance between student residence and school to instrument for endogenous school selection, they find substantial heterogeneity in school effects: newly created small schools have positive effects on graduation and some other education outcomes while older small schools do not. Importantly, the authors show that ignoring this source of treatment effect heterogeneity by assuming a common small school effect yields a misleading zero effect of small school attendance.
Determinants of College Major Choice: Identification using an Information Experiment
Matthew Wiswall and Basit Zafar
Working Paper #02-11
This paper studies the determinants of college major choice using a unique "information" experiment embedded in a survey. The authors first ask respondents their self beliefs of beliefs about their own expected earnings and other major-specific outcomes conditional on various majors, their population beliefs--beliefs about the population distribution of these characteristics, as well as their subjective beliefs that they will graduate with each major. After eliciting these baseline beliefs, the authors provide students with information on the true population distribution of these characteristics, and observe how this new information causes respondents to update their beliefs. This experimental design creates unique panel data. They first show that respondents make substantial errors in population beliefs, and logically revise their self beliefs in response to the information. Subjective beliefs about future major choice are positively and strongly associated with beliefs about self earnings, ability, and spouseís earnings. However, cross-sectional estimates are severely biased upwards because of the positive correlation of tastes with earnings and ability. The experimental variation in beliefs allows us to identify a rich model of college major choice, with which they estimate the relative importance of earnings and earnings uncertainty on the choice of college major versus other factors such as ability to complete coursework, spouse's characteristics, and tastes for majors. While earnings are a significant determinant of major choice, tastes are the dominant factor in the choice of field of study. The authors also investigate why males and females choose different college majors.
Do Charter Schools Crowd Out Private School Enrollment: Evidence from Michigan
Rajashri Chakrabarti and Joydeep Roy
Working Paper #01-11
Charter schools have been one of the most important dimensions of recent school reform measures in the United States. Currently, there are more than 5,000 charter schools spread across the 40 U.S. states and the District of Columbia. Though there have been numerous studies on the effects of charter schools, these have mostly been confined to analyzing their effects on student achievement, student demographic composition, parental satisfaction and the competitive effects on regular public schools. This study departs from the existing literature by investigating the effect of charter schools on enrollment in private schools. To investigate this issue empirically, the authors focus on the state of Michigan where there was a significant spread of charter schools in the nineties. Using data on private school enrollment from biennial NCES private school surveys, and using a fixed effects as well as instrumental variables strategy that exploits exogenous variation from Michigan charter law, they investigate the effect of charter school penetration on private school enrollment. The authors find robust evidence of a decline in enrollment in private schools,—but the effect is only modest in size. They do not find evidence that enrollments in Catholic or other religious schools suffered more relative to those in non-religious private schools.
Evolution of Gender Differences in Post-Secondary Human Capital Investments: College Majors
Ahu Germici and Matthew Wiswall
Working Paper #03-11
Over the past 40 years, the level of human capital investments has changed substantially for men and women. Changes in the intensive margin of college major selection have been also been substantial, as the number of graduates in humanities, social science, and teaching has declined, and the number in science, engineering, and business has increased, especially for women. However, while women are now more likely to complete a college degree than men, the distribution of college majors among college graduates remains unequal with women about 2/3 as likely as men to major in a business or science field. In this paper, the authors develop and estimate a dynamic overlapping generations model of human capital investment and employment decisions to understand these longterm changes in human capital investments. Their departure from the previous literature is that they separately examine college major choices, rather than aggregating these choices to the education level (e.g. college or no college). The authors overcome the absence of field of study information in the CPS and Census data by combining these data with auxiliary data sources which characterize the changes in field of study composition across a large number of birth cohorts. Results from counterfactual experiments show that changes in skill prices, higher schooling costs, and a reduction in the value of home for women all played an important role in the educational attainment and college major composition trends.
Effect of Constraints on Tiebout Competition: Evidence from the Michigan State Finance Reform
Rajashri Chakrabarti and Joydeep Roy
Working Paper #10-01
In this paper, the authors examine the effects of constraints in a Tiebout framework in the context of school finance reforms. They use data from Michigan, which enacted a comprehensive school finance reform in 1994 that in effect ended local discretion over school spending. This scenario affords us a unique opportunity to study the implications of imposing limits on local government’s control of the quality of local public goods. They find that the reform was successful in overturning existing trends towards increased disparities. However, the reform also constrained the highest-spending districts, with negative effects on their subsequent educational outcomes. These results survive several sensitivity checks. Going behind the black box to look at whether the reform affected incentives and responses, the authors find that loss of discretion acted as a strong disincentive to high spending districts, and more generally, across the board. The improvements in performance of the lowest-spending districts were likely caused by relative increases in spending rather than higher effort. Results from an alternative strategy, which exploits differences in the nature of incentives faced by districts located in more competitive areas versus those in less competitive areas, corroborate the same finding.
Income Inequality, the Median Voter, and the Support for Public Education
Sean P. Corcoran and William N. Evans
NBER Working Paper
Using a panel of U.S. school districts spanning 1970 - 2000, the authors examine the relationship between income inequality and fiscal support for public education. In contrast with recent theoretical and empirical work suggesting a negative relationship between inequality and public spending, they find results consistent with a median voter model, in which inequality that reduces the median voter's tax share induces higher local spending on public education. The authors estimate that 12 to 22 percent of the increase in local school spending over this period is attributable to rising inequality.
Testing the Quantity-Quality Model of Fertility: Linearity, Marginal Effects, and Total Effects
Magne Mogstad and Matthew Wiswall
The authors re-examine the recent empirical evidence suggesting no tradeoff between child quantity and quality. Motivated by the theoretical ambiguity about the magnitude and sign of the marginal effects on child quality of additional siblings, they depart from previous empirical studies in allowing an unrestricted relationship between family size and child outcome. They find that the conclusion of no family size effect is an artifact of a linear specification in family size, masking substantial marginal family size effects. This is true when they perform OLS estimation with controls for confounding characteristics like birth order, or instrument family size with twin births.
What Linear Estimators Miss: Re-Examining the Effects of Family Income on Child Outcomes
Katrine V. Loken, Magne Modstad and Matthew Wiswall
This paper uses a rich Norwegian dataset to re-examine the causal relationship between family income and child outcomes. Motivated by theoretical predictions and OLS results that suggest a nonlinear relationship, the authors depart from previous studies in allowing the marginal effects on children’s outcomes of an increase in family income to vary across the income distribution. Their nonlinear IV and fixedeffect estimates show an increasing, concave relationship between family income and children’s educational attainment and IQ. The linear estimates, however, suggest small, if any, effect of family income, because they assign little weight to the large marginal effects at the lower part of the income distribution.