My Answer to Bryan's

Query on his on selection bias.


I think those who spend their lives in academia will tend to underestimate the return to education.

As Card points out the return to education is higher for those who have limited access. Moreover, academics tend to enjoy the education process and will seek education beyond the point where the marginal pecuniary return is exceeds the marginal cost.

This will lead academics to conclude that education doesn't pay.

Indeed, I felt this way myself until leaving academia to make my fortune on the Internet and subsequently losing it all. My stint in working class America lead me to believe that if anything the return to education is smaller for those with talent than those without. Indeed I suspect that the standard OLS measures may underestimate the return average return.

That is marginal benefit falls with increasing talent but 'disutility' falls faster causing the talented to seek more education and downwardly biasing the estimates.