Standard econometric methods can overlook the issue of heterogeneity in corporate policy making, generating biased estimates. We propose ways to identify and address the firm policy heterogeneity bias in practice. In doing so, we introduce a new test determining whether standard firm-fixed...

Considerable effort has been exercised in estimating mean returns to education while carefully considering biases arising from unmeasured ability and measurement error. Some recent work has also attempted to determine whether there are variations from the "mean" return to education across the...