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Convexity and Sheepskin Effects in the Human Capital Earnings Function: Recent Evidence for Filipino Men

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Author Info
Norbert R. Schady

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Abstract

The issue of possible non-linearities in the relationship between log wages and schooling has received a good deal of attention in the literature. This paper uses data from a recent, high quality household survey for the Philippines, the 1998 Annual Poverty Indicator Survey (APIS), to test the fit of the log-linear specification for Filipino men. The results are based on a number of estimation strategies, including spline regressions, and semi-parametric regressions with a large number of dummies for years of schooling and experience. The basic conclusions of the paper are two. First, there appear to be large differences between the rates of return to education across levels in the Philippines. In particular, the returns to both primary and secondary education are lower than those for tertiary education, a difference which persists even after correcting for differences in direct private costs across levels. Second, within a given level, the last year of schooling is disproportionately rewarded in terms of higher wages. That is, there are clear sheepskin effects associated with graduation from primary school, secondary school, and university. Copyright 2003 Blackwell Publishing Ltd.

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

Volume (Year): 65 (2003)
Issue (Month): 2 (05)
Pages: 171-196
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Handle: RePEc:bla:obuest:v:65:y:2003:i:2:p:171-196

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  15. Belman, Dale & Heywood, John S, 1997. "Sheepskin Effects by Cohort: Implications of Job Matching in a Signaling Model," Oxford Economic Papers, Oxford University Press, vol. 49(4), pages 623-37, October. [Downloadable!] (restricted)
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  22. Behrman, Jere R & Rosenzweig, Mark R & Taubman, Paul, 1994. "Endowments and the Allocation of Schooling in the Family and in the Marriage Market: The Twins Experiment," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1131-74, December. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Sebastian Calonico & Hugo Ñopo, 2007. "Returns to Private Education in Peru," RES Working Papers 4516, Inter-American Development Bank, Research Department. [Downloadable!]
    Other versions:
  2. Nga Nguyet Nguyen, 2002. "Trends in the education sector from 1993 - 98," Policy Research Working Paper Series 2891, The World Bank. [Downloadable!]
  3. Anna Crespo & Maurício Cortez, 2005. "The Sheepskin Effects Evolution From 1982 To 2002 In Brazil: The Roles Of Labor Supply And Demand Changes," Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33th Brazilian Economics Meeting] 167, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
  4. Fiess, Norbert M. & Verner, Dorte, 2003. "Migration and human capital in Brazil during the 1990s," Policy Research Working Paper Series 3093, The World Bank. [Downloadable!]
  5. Sebastian Calonico & Hugo Ñopo, 2007. "Retornos a la Educación Privada en Perú," RES Working Papers 4517, Inter-American Development Bank, Research Department. [Downloadable!]
  6. Yamauchi, Futoshi, 2006. "Early childhood nutrition, schooling, and sibling inequality in a dynamic context: evidence from South Africa," FCND discussion papers 203, International Food Policy Research Institute (IFPRI). [Downloadable!]
    Other versions:
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