Several previous studies have relied on religious
affiliation and the proximity to Catholic schools as exogenous
sources of variation for identifying the effect of Catholic schooling
on a wide variety of outcomes. Using three separate methodologies,
we examine the validity of these instrumental variables. We find
that none of the candidate instruments is a useful source of identification
of the Catholic school effect, at least in currently available
data sets. In particular, two stage least square procedures using
Catholic religion or proximity as an instrument imply implausibly
large positive effects for high school graduation and college
attendance rates, but each of the evaluation methods imply biases
of similar magnitudes to the 2SLS coefficients themselves. In
these situations, with both 2SLS estimates and potential biases
being very large, instrumental variables methods may not contribute
any new information beyond that gained from single-equation estimates.
Joseph Altonji,
Department of Economics, Yale University
Todd Elder, Department of
Economics, Northwestern University
Christopher Taber, Department
of Economics, Northwestern University
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