Understanding Wage Disparities Through Educational Attainment
DOI:
https://doi.org/10.5281/zenodo.17018216Keywords:
Education, Wage Disparity, Instrumental Variables, American Community Survey, Labor EconomicsAbstract
This paper investigates the causal effect of education on wages using data from the 2018 American Community Survey (ACS) accessed through IPUMS. Our paper tests the causal effect of educational attainment on wages using individual-level data by using quarter of birth as an instrumental variable for education. We hypothesize that higher education leads to significantly higher wages. Based on our IV regression model, we find that each additional year of education is associated with approximately a 20.8% increase in log wages. These results support the importance of education in explaining wage differences, although other factors such as gender also play a notable role.
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Copyright (c) 2025 Jiayi Zhang, Xiaoran Han (Author)
This work is licensed under a Creative Commons Attribution 4.0 International License.
