Identifying Marginal Returns to Education Through Social Networks

Date

2016

Authors

Hersey, Timothy

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Abstract

This thesis explores the role of peers in influencing the decision of individuals to attend college and the resulting labour market outcomes. It proposes a model, combining the econometric methods of networks and treatment effects, to estimate the marginal treatment effect of education when peers have influence on the wage outcome and probability of treatment for an individual. Using Monte Carlo simulations, the effect of networks on the treatment effects model is investigated. We further explore the model by varying the network structure and conducting sensitivity analyses, considering the impact of networks on policy. Our results suggest that networks initially have a significant positive impact on the returns to education and the effects of policy. However, this effect is reduced once homophily in characteristics is introduced.

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School of Economics

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Thesis (B.Ec.(Hons)) -- University of Adelaide, School of Economics, 2017

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This electronic version is made publicly available by the University of Adelaide in accordance with its open access policy for student theses. Copyright in this thesis remains with the author. This thesis may incorporate third party material which has been used by the author pursuant to Fair Dealing exceptions. If you are the author of this thesis and do not wish it to be made publicly available, or you are the owner of any included third party copyright material you wish to be removed from this electronic version, please complete the take down form located at: http://www.adelaide.edu.au/legals

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This item is only available electronically.

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