More schooling can give you more skills. It can give you a signal of your ability (including your ability to conform). It also can give you membership in a cartel, to be a public school teacher, for example. I worry that it could be that growth in the cartel-membership value of schooling could account for some of the apparent long-term returns to schooling.
By the way, some of the studies that use instrumental variables to show a long-term return to schooling based on "natural experiments" are not persuasive. It turns out that if you look at the instruments, they are weak or questionable.