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Does it pay for Indigenous youth to go to school? Variation in the predicted economic benefits of High School

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  • Nicholas Biddle

    (Australian National University)

Abstract

Indigenous Australians are less likely to complete high school than non-Indigenous Australians. One reason for this may be differences in the income and employment incentives to do so. This paper provides evidence on the predicted economic benefits of education using data from the National Aboriginal and Torres Strait Islander Social Survey, focusing on variation within the Indigenous population. The paper finds the difference in employment outcomes by high school education to be smaller for those in remote areas than those in non-remote areas, however once employed the relative effect on income varies by the particular education comparison. The income benefits of education are low for those in both CDEP and non-CDEP employment, showing that for Indigenous Australians, one of the biggest economic benefits of completing high school appears to be the ability to find a non-CDEP job.

Suggested Citation

  • Nicholas Biddle, 2006. "Does it pay for Indigenous youth to go to school? Variation in the predicted economic benefits of High School," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 9(2), pages 173-199, June.
    • Handle: RePEc:ozl:journl:v:9:y:2006:i:2:p:173-199
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    References listed on IDEAS

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    1. Justin L. Tobias, 2003. "Are Returns to Schooling Concentrated Among the Most Able? A Semiparametric Analysis of the Ability–earnings Relationships," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(1), pages 1-29, February.
    2. Kevin Hollenbeck & Jean Kimmel, 2001. "The Returns to Education and Basic Skills Training for Individuals with Poor Health or Disability," Upjohn Working Papers 01-72, W.E. Upjohn Institute for Employment Research.
    3. Gordon B. Dahl, 2002. "Mobility and the Return to Education: Testing a Roy Model with Multiple Markets," Econometrica, Econometric Society, vol. 70(6), pages 2367-2420, November.
    4. Altman, Jon & Gray, Matthew & Levitus, Robert, 2005. "Policy issues for the Community Development Employment Projects scheme in rural and remote Australia," MPRA Paper 1391, University Library of Munich, Germany.
    5. Boyd H. Hunter, 2003. "The Rise of the CDEP Scheme and Changing Factors Underlying Indigenous Male Employment," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 6(3), pages 473-496, September.
    6. Russell Ross, 1993. "A Probit Analysis of Aboriginal Employment Prospects in New South Wales," The Economic Record, The Economic Society of Australia, vol. 69(3), pages 253-258, September.
    7. Peter Streufert, 2000. "The Effect of Underclass Social Isolation on Schooling Choice," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 2(4), pages 461-482, October.
    8. P. N. Junankar, 2003. "Estimating the Social Rate of Return to Education for Indigenous Australians," Education Economics, Taylor & Francis Journals, vol. 11(2), pages 169-192.
    9. James Heckman & Edward Vytlacil, 2001. "Identifying The Role Of Cognitive Ability In Explaining The Level Of And Change In The Return To Schooling," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 1-12, February.
    10. Roland G. Fryer & Steven D. Levitt, 2013. "Testing for Racial Differences in the Mental Ability of Young Children," American Economic Review, American Economic Association, vol. 103(2), pages 981-1005, April.
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    Cited by:

    1. Catherine Ris & Samuel Gorohouna, 2013. "Decomposing differences in employment outcomes between Kanak and other New Caledonians - how important is the role of school achievement?," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 16(1), pages 115-135.
    2. Benjamin J. Stephens, 2010. "The Determinants of Labour Force Status among Indigenous Australians," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 13(3), pages 287-312.

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    More about this item

    Keywords

    Education; Economics of Minorities and Races; Non-labor Discrimination; Wage Level and Structure; Wage Differentials by Skill; Training; Occupation; etc.;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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