Unobservable family effects and the apparent external benefits of education
Economics of Education Review Volume 20, Number 3 ISSN 0272-7757 Publisher: Elsevier Ltd
Estimates of the returns to education usually ignore private and external non-marketed benefits, which, if counted, may double the social rate of return (Haveman, R., Wolfe, B., 1984. Schooling and economic well-being: the role of nonmarket effects. "Journal of Human Resources" 19, 377–407.). There are formidable difficulties in measuring these non-market benefits, so before trying it is worth checking whether the claimed benefits are in fact caused by education. This paper examines the effect of education on volunteer work, which is listed by Wolfe (Wolfe, B., 1994. External benefits of education. In: Husen, T., Postlethwaite, N. (Eds.) "The International Encyclopaedia of Education", Pergamon, Oxford, pp. 2208–2212.) as a non-marketed output benefiting both private individuals and the general public. The positive correlation between education and the probability of volunteering seems to support this claim, but previous studies have ignored the role of family unobservables. This study uses data from a sample of twins to test the relationship between education and volunteering, holding unobservable family effects constant. The results show that education significantly reduces the probability of volunteering and the supply of volunteer hours, so volunteering may not be an external benefit of education.
Gibson, J. Unobservable family effects and the apparent external benefits of education. Economics of Education Review, 20(3), 225-233. Elsevier Ltd.