The causality / endogeneity problems with estimating returns to schooling (due to unobserved individual "ability" variables) have been known to economists if no

The causality / endogeneity problems with estimating returns to schooling (due to unobserved individual "ability" variables) have been known to economists if not politicians) since since at least the 1960s, probably even earlier, see e.g. the intro of http://davidcard.berkeley.edu/papers/causal_educ_earnings.pdf http://davidcard.berkeley.edu/papers/causal_educ_earnings.pd... Measuring the true returns of education is impossible, both on the individual level (we can't replay history with alternative choices) and the population level (clean randomisation on education is socially unacceptable), so all we have are approximations and methodological hacks (technical summary in linked summary paper). But such approximations typically found that "ability bias" was not all that large.