We estimate the effect of education on lifetime earnings by distinguishing between individuals who lived in rural or urban areas during childhood and between individuals with access to many or few books at home at age ten. We instrument years of education using compulsory school reforms and find that, whereas individuals in rural areas were most affected by the reforms, those with many books enjoyed substantially higher returns to their additional education. We argue that the long-lasting beneficial effects of having books are
due to the cultural environment in the household and the development of cognitive skills rather than to short-term liquidity constraints.
Presented by:
Guglielmo Weber (University of Padua)
Date & time:
July 1, 2013 3:00 pm - July 1, 2013 4:30 pm
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