Research has found that season of birth is associated with later health and professional outcomes; what drives this association remains unclear. We consider a new explanation—that children born in different seasons have mothers with different socioeconomic characteristics. We document large seasonal changes in the characteristics of women giving birth in the United States; these changes explain nearly half of the relationship between season of birth and adult outcomes. Our findings suggest that using season of birth as an instrumental variable may produce inconsistent estimates. Finally, seasonality in maternal characteristics is partly due to weather differentially affecting fertility across socioeconomic groups. 1 Research across the social and natural sciences has consistently found that the month of a child’s birth is associated with later outcomes involving health, educational attainment, earnings and mortality. Much of this work shows that on average individuals born in the winter have worse outcomes (less schooling, lower wages) than other individuals. What drives this association remains unclear. Some prior work has speculated that this association may be driven

In this paper we reconsider the analysis of the effect of education on income by Angrist and Krueger (1991). In order to account for possible endogeneity of the education spell, these authors use quarter of birth to form valid instruments. Angrist and Krueger apply a classical method, two-stage least-squares (2SLS), and consider results for data sets on individuals from all states of the US. In this paper the research by Angrist and Krueger is extended both in a methodological and an empirical way. Classical as well as Bayesian methods are used. Bayesian results under the Jeffreys prior are emphasized, as these results are valid in finite samples and because in the instrumental variables (IV) regression model the Jeffreys prior is in a certain sense, truly, non-informative. Further, it is considered how results vary between subsets of the data corresponding to regions of the US. Finally, some assumptions of Angrist and Krueger are investigated and it is examined if one could still obtain usable results if some assumptions are dropped. Our main findings are: (1) The Angrist-Krueger results on returns to education for the USA are almost

Research has found that season of birth is associated with later health and professional outcomes; what drives this association remains unclear. In this paper we consider a new explanation: that children born at different times in the year are conceived by women with different socioeconomic characteristics. We document large seasonal changes in the characteristics of women giving birth throughout the year in the United States. Children born in the winter are disproportionally likely to be born to women who are teenagers, who are unmarried, and who lack a high school degree. We show that controls for family background characteristics can explain up to half of the relationship between season of birth and adult outcomes. Our findings suggest that, though popular, using season of birth as an instrumental variable may produce inconsistent estimates. Finally, we provide evidence that seasonality in maternal characteristics is driven by high-socioeconomic status women disproportionately planning births away from winter. Research across the social and natural sciences has consistently found that the month of a child’s birth is associated with later outcomes involving health, educational attainment, earnings and mortality. Much of this work shows that on average individuals born in the winter have worse outcomes (less schooling, lower wages) than other individuals. What drives this

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A simple regression of earned income on years of education in order to measure the education-income effect neglects important issues. Although higher education levels are expected to increase an individual’s earnings, the incomeeducation relationship can be subject to omitted variables such as individuals’

We set out a Gibbs sampler for the linear instrumental-variable model with normal errors and normal priors, and we show how to compute the marginal likelihood. 1

University of

In this paper we reconsider the well-known analysis of the effect of education on income by Angrist and Krueger (1991). In order to account for possible endogeneity of the education spell, these authors use quarter of birth to form valid instruments. Angrist and Krueger apply a classical method, two-stage least-squares (2SLS), and consider results for data sets on individuals from all states of the US. In this paper the research by Angrist and Krueger is extended both in a methodological and an empirical way. Classical as well as Bayesian methods are used. Bayesian results under the Jeffreys prior are emphasized, as these results are valid in finite samples and because in the instrumental variables (IV) regression model the Jeffreys prior is in a certain sense, truly, non-informative. Further, it is considered how results vary between subsets of the data corresponding to regions of the US. Finally, some assumptions of Angrist and Krueger are investigated and it is examined if one could still obtain usable results if some assumptions are dropped. Our main findings are: (1) The Angrist-Krueger results on returns to education for the USA are almost

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