Estimating the returns to education: accounting for heterogeneity in ability
Harry Anthony Patrinos, Cristóbal Ridao-Cano, Chris N. Sakellariou, World Bank. Human Development Network. Education Team
World Bank, Human Development Network, Education Team, 2006 - Mathematics - 38 pages
Typically estimates of the benefits of education investments show average private rates of return for the average individual. The average may not be useful for policy. An examination of the distribution of the returns across individuals is needed. The few studies that have examined these patterns focus on high-income countries, showing investments to be more profitable at the top of the income distribution. The implication is that investments may increase inequality. Extending the analysis to 16 East Asian and Latin American countries the authors observe mixed evidence in middle-income countries and decreasing returns in low-income countries. Such differences between countries could be due to more job mobility in industrial countries, scarcity of skills, or differential exposure to market forces.
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Argentina average returns Bolivia Brazil Cambodia Chile China Colombia conditional distribution decrease with quantiles decreasing U-shaped Substitutes dependent variable developing countries earnings distribution East Asian countries education and ability Education Level education tends Employcd for wages Employed for wages Employed with secondary Encuesta estimates evidence Guatemala Hogares income countries increasing Monotonic Complements increasing returns Indonesia Labor Force Participation labor market Latin American countries less than primary LF/unemployed low-income countries Male Female Education Male Female Edueation Mexico Mongolia Monotonic Complements Increase N/A N/A N/A October 2006 October OECD pattern of returns percent Philippines primary completed public sector regression analysis returns by quantile returns to education returns with quantiles sample secondary education Secondary vocational Sectoral Composition seeond self-employed/employers Share of sclf-employed/employers Share of unpaid Share of wage Singapore Strongly increasing Monotonic teehnieal Thailand U-shaped Substitutes Decrease university complete unobservable skills unpaid employment upper secondary Venezuela Vietnam wage employment ycars All Male