Doubly Robust Estimation of Causal Effects with Multivalued Treatments: An Application to the Returns to Schooling

Abstract

This paper provides doubly robust estimators for treatment effect parameters which are defined in a multivalued treatment effect framework. We apply this method to the unique dataset of the 1970 British Cohort Study (BCS70) to estimate returns to various levels of schooling. The analysis is carried out for female and male samples separately to capture possible gender differences. Average returns are estimated for the entire population, as well as conditional on having a specific educational achievement. For males, relative to no qualification, we find an average return to O‐levels of 6.3%, to A‐levels of 7.9% and to higher education of 25.4%. The estimated average returns to O‐level and A‐level relative to no qualification are insignificant for females, whereas the return to higher education is 19.9%.Copyright © 2014 John Wiley & Sons, Ltd.