ESTIMATES OF THE ECONOMIC RETURN TO SCHOOLING FROM A NEW SAMPLE OF TWINS

This paper uses a new survey to contrast the wages of genetically iden tical twins with different schooling levels. Multiple measurements of schooling levels were also collected to assess the effect of reporting error on the estimated economic returns to schooling. The data indica te that omitted ability variables do not bias the estimated return to schooling upward, but that measurement error does bias it downward. Ad justment for measurement error indicates that an additional year of sc hooling increases wages by 12-16 percent, a higher estimate of the eco nomic returns to schooling than has been previously found.