Education and nonmarket outcomes

I explore the effects of education on nonmarket outcomes from both theoretical and empirical perspectives. Examples of outcomes considered include general consumption patterns at a moment in time, savings and the rate of growth of consumption over time, own (adult) health and inputs into the production of own health, fertility, and child quality or well-being reflected by their health and cognitive development. I pay a good deal of attention to the effects of education on health because they are the two most important sources of human capital: knowledge capital and health capital. There is a large literature addressing the nature of their complementarities. In the conceptual foundation section, I consider models in which education has productive efficiency and allocative efficiency effects. I then modify these frameworks to allow for the endogenous nature of schooling decisions, so that observed schooling effects can be traced in part to omitted "third variables " such as an orientation towards the future. An additional complication is that schooling may contribute to a future orientation. The empirical review provides a good deal of evidence for the proposition that the education effects are causal but is less conclusive with regard to the identification of specific mechanisms