James W. Banks, Leandro S. Carvalho, and Francisco Perez-Arce write,
This article studies the causal effect of education on decision-making. In 1972 England raised its minimum school-leaving age from 15 to 16 for students born after September 1, 1957. An online survey was conducted with 2,700 individuals born in a 36-month window on either side of this date. Participants made 25 incentivized risk choices that allow us to measure multiple dimensions of decision-making. Despite the policy having effects on education, educational qualifications, and income, we find no effects of the policy on decision-making or decision-making quality.
Thanks to a reader for the pointer. This sounds like a win for both the Null Hypothesis and Bryan Caplan’s signaling story.
I’d think that effects on income are more important, and more objective, than measuring decision making quality.
Maybe the paper talks about this, but my prior training in estimating probabilities and values of possible outcomes, needed for decision analysis, makes it seem unlikely that there is a rigorous methodology used for measuring decision quality.
(hmm, often my comments are held in moderation?)
1. Did the (roughly) 1350 individuals born before Sept 1957 have in fact one year less education than those born later? Or were only some less educated?
2. I notice that just about all these individuals would have been in their mid 50’s to early 60’s when these tests of their decision-making capabilities were made. I’ve got a strong suspicion that simply living to that kind of age might be more important than one far-disant year of high school.
Your point 2 is why this is a win for the null.