This study investigated the causal relationship between educational attainment and labor market outcomes using instrumental variable (IV) estimation and panel data methods to address endogeneity concerns. Drawing on data from the National Longitudinal Survey of Youth (NLSY97), which followed approximately 9,000 individuals from adolescence through mid-career, the research employed geographic proximity to colleges, state-level merit scholarship programs, and compulsory schooling laws as instruments for educational decisions. The IV analysis revealed that each additional year of education increased hourly wages by 13.2%, substantially higher than the 9.7% indicated by OLS estimates, suggesting that conventional approaches underestimated education's true returns. Significant heterogeneity in returns was observed across demographic groups, with traditionally underrepresented populations experiencing markedly higher benefits: women (14.9% versus 11.6% for men), racial/ethnic minorities (15.7-16.8% versus 11.2% for white respondents), and individuals from lower-income backgrounds (18.2% versus 9.3% for higher-income peers). Panel data analysis demonstrated that education's impact varied across career stages, with returns peaking during years 6-10 of labor market experience before gradually diminishing in later career phases. Beyond wage effects, education substantially improved multiple dimensions of labor market performance, including employment stability (+2.16 weeks employed annually per year of education), job tenure (+0.39 years), job satisfaction (+0.20 points on a 5-point scale), occupational prestige (+4.52 points), and access to benefits (+0.29 points on the benefits coverage index). These findings underscored that education yielded comprehensive labor market benefits extending beyond conventional wage returns, with particularly high marginal returns for disadvantaged groups, suggesting that targeted educational investments could serve as powerful mechanisms for reducing labor market inequalities while promoting both economic efficiency and social equity.