The Non-Market Benefits of Education and Ability

By: James J. Heckman (The University of Chicago) ; John Eric Humphries (Yale University) ; Gregory Veramendi (W.P. Carey School of Business, Arizona State University)
This paper analyzes the non-market benefits of education and ability. Using a dynamic model of educational choice we estimate returns to education that account for selection bias and sorting on gains. We investigate a range of non-market outcomes including incarceration, mental health, voter participation, trust, and participation in welfare. We find distinct patterns of returns that depend on the levels of schooling and ability. Unlike the monetary benefits of education, the benefits to education for many non-market outcomes are greater for low-ability persons. College graduation decreases welfare use, lowers depression, and raises self-esteem more for less-able individuals.
Keywords: education, Inequality, returns to education, government policy, health inequality, household behavior, family economics
JEL: I14 I24 I28 D10

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