Instrumental Variables in Education Research

Instrumental variables (IV) estimation is a quasi-experimental strategy for isolating the causal effect of schooling or educational interventions when assignment to treatment is confounded by unobserved factors. Pioneered in education economics by Angrist and Krueger's use of quarter-of-birth as an instrument for compulsory schooling, IV finds a source of exogenous variation in exposure to education and uses only that variation to estimate outcomes such as earnings, test scores, or attainment.