eople with more education typically commandhigher pay for their labor relative to those withlower levels of education. This wage differential isoften referred to as “the return to education.” Implicit inthis language is the notion that education constitutes an“investment” in human capital. The relationship between education and wages is a subject of intense study in the field of labor economics.Researchers are particularly interested in determiningwhether causal factors underlie this statistical correlation.For example, do advanced education programs make peoplemore productive, so that higher wages are the by-productof higher productivity? Or do these programs naturallyattract the most productive members of society, so thateducation per se is inconsequential for determining wages?Such questions could be answered in a straightforwardmanner if economists could perform controlled experi-ments. For better or worse, such experiments are not feasi-ble. You would have to have two identical people, send onlyone to college, and record the results. Instead, economiststry to compare people who share many common character-istics except education. Most studies find that, after con-trolling for other characteristics, each additional year ofeducation increases hourly wages by 8 to 13 percent.