Further estimates of the economic return to schooling from a new sample oftwins

In a recent, and widely cited, paper, Ashenfelter & Krueger (1994) use a ne w sample of identical twins to investigate the contribution of genetic abil ity to the observed cross-sectional return to schooling. This paper re-exam ines Ashenfelter & Krueger's estimates using three additional years of the same twins survey. I find that the return to schooling among identical twin s is about 10% per year of schooling completed. Most importantly, unlike th e results reported in Ashenfelter and Krueger, I find that the within-twin regression estimate of the effect of schooling on the log wage is smaller t han the cross-sectional estimate, implying a small upward bias in the cross -sectional estimate. Ashenfelter & Krueger's measurement error corrected es timates are insignificantly different from those presented here, however. F inally, there is evidence of an important individual-specific component to the measurement error in schooling reports. [JEL: J24, 121] (C) 1999 Elsevi er Science Ltd. All rights reserved.