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School Repetition, Dropouts, and the Rates of Return to Schooling: The Case of Indonesia

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Author Info

  • Behrman, Jere R
  • Deolalikar, Anil B

Abstract

Standard Estimates of the rates of return to primary schooling in most developing countries are high, and have been used to support advocacy of increased investments in primary schooling. But the standard estimates ignore repetition and dropout experience. This paper develops a procedure for estimating the impact of repetition and dropout rates and applies it to Indonesian data. The results are striking, suggesting that standard procedures overstate substantially the economic returns to schooling in Indonesia (eg. by 38 to 78 percent for primary schooling), distort the pattern of estimated returns across schooling levels by overestimating especially the returns to the lower schooling levels, and misrepresent the relative returns to schooling investments among groups identified by sex, rural-urban residence, and age. Copyright 1991 by Blackwell Publishing Ltd

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Bibliographic Info

Article provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics & Statistics.

Volume (Year): 53 (1991)
Issue (Month): 4 (November)
Pages: 467-80

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Handle: RePEc:bla:obuest:v:53:y:1991:i:4:p:467-80

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Cited by:
  1. Susan W. Parker & Luis Rubalcava & Graciela Teruel, 2002. "Schooling Inequality among the Indigenous: A Problem of Resources or Language Barriers?," Research Department Publications 3134, Inter-American Development Bank, Research Department.
  2. King, Elizabeth M. & Orazem, Peter & Paterno, Elizabeth M., 2008. "Promotion with and Without Learning: Effects on Student Enrollment and Dropout Behavior," Staff General Research Papers 12968, Iowa State University, Department of Economics.
  3. Patrinos, Harry Anthony & Psacharopoulos, George, 1992. "Socioeconomic and ethnic determinants of grade repetition in Bolivia and Guatemala," Policy Research Working Paper Series 1028, The World Bank.
  4. Aashish Mehta & Hector Villarreal, 2008. "Why do diplomas pay? An expanded Mincerian framework applied to Mexico," Applied Economics, Taylor & Francis Journals, vol. 40(24), pages 3127-3144.
  5. Suzanne Duryea, 1998. "Children's Advancement Through School in Brazil: The Role of Transitory Shocks to Household Income," Research Department Publications 4124, Inter-American Development Bank, Research Department.
  6. Lachler, Ulrich, 1998. "Education and earnings inequality in Mexico," Policy Research Working Paper Series 1949, The World Bank.
  7. Suzanne Duryea, 1998. "El avance de los niños a lo largo del sistema educativo en Brasil: el papel de las sacudidas transitorias del ingreso familiar," Research Department Publications 4125, Inter-American Development Bank, Research Department.
  8. Rossana Patrón, 2011. "When more schooling is not worth the effort: another look at the dropout decisions of disadvantaged students in Uruguay," Documentos de Trabajo (working papers) 0511, Department of Economics - dECON.
  9. Tobing, Elwin, 2011. "Taxation, human capital formation, and long-run growth with private investment in education," Journal of Asian Economics, Elsevier, vol. 22(1), pages 48-60, February.
  10. Gurleen Popli, 2005. "Rising Wage Inequality in Mexico: Structural Reforms or Changing Labor Market Institutions?," Working Papers 2005016, The University of Sheffield, Department of Economics, revised Nov 2005.

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