Heterogeneity in Returns to College Education: Selection Bias in Contemporary Taiwan

Archived Abstract of Former PSC Researcher

Tsai, Shu-Ling, and Yu Xie. 2011. "Heterogeneity in Returns to College Education: Selection Bias in Contemporary Taiwan." Social Science Research, 40(3): 796-810.

The causal impact of higher education on earnings may be heterogeneous across different members of a population. Using a newly developed instrumental-variable method in economics, we illustrate heterogeneous treatment effects of higher education on earnings resulting from sorting mechanisms that select individuals with certain unobserved attributes into college education. The setting of our empirical work is contemporary Taiwan – a transitional economy that has recently experienced a rapid expansion in higher education. We find distinct patterns by gender, with selection bias most clearly shown among women but not among men: the college return to earnings is on average greater for women who actually attended college than women who did not attend college.

10.1016/j.ssresearch.2010.12.008

PMCID: PMC3102252. (Pub Med Central)

Country of focus: Taiwan.

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