A Bayesian analysis of parental education as instruments in estimating the return to schooling

摘要

Questions such as whether the instrumental variable (IV) estimates of return to schooling are sensitive to the violation of the exclusion restriction often draw empirical concerns. We employ a Bayesian method to compare the IV estimate using either mother's or father's education as an instrumental variable under different degree of violation of the exclusion restriction. We find that a moderate violation of the exclusion restriction does not have a substantial influence on the estimation results. Particularly, the IV estimate using mother's education as an IV is more robust than that based on father's education.