IDEAS home Printed from https://ideas.repec.org/a/taf/edecon/v24y2016i3p300-311.html
   My bibliography  Save this article

Returns to education in Sri Lanka: a pseudo-panel approach

Author

Listed:
  • Rozana Himaz
  • Harsha Aturupane

Abstract

This study employs a pseudo-panel approach to estimate the returns to education among income earners in Sri Lanka. Pseudo-panel data are constructed from nine repeated cross sections of Sri Lanka's Labor Force Survey data from 1997 to 2008, for workers born during 1953--1974. The results show that for males, one extra year of education increases monthly earnings by about 5% using the pseudo-panel estimation rather than 9% as in the ordinary least-squares (OLS) estimation. This indicates that not controlling for unobservables such as ability and motivation biases the OLS estimation of returns upwards by about 4% on average, driven mainly by what happens in urban areas. It also suggests that males with higher ability seem to be acquiring more years of education. This is contrary to what has been observed recently in countries such as Thailand [Warunsiri, S., and R. McNown. 2010. “The Return to Education in Thailand: A Pseudo-Panel Approach.” World Development 38 (1): 1616--1625], where the opportunity cost of education seems to be high, such that high-ability individuals leave education for the labour market.

Suggested Citation

  • Rozana Himaz & Harsha Aturupane, 2016. "Returns to education in Sri Lanka: a pseudo-panel approach," Education Economics, Taylor & Francis Journals, vol. 24(3), pages 300-311, June.
    • Handle: RePEc:taf:edecon:v:24:y:2016:i:3:p:300-311
    DOI: 10.1080/09645292.2015.1005575
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09645292.2015.1005575
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09645292.2015.1005575?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Verbeek, Marno & Nijman, Theo, 1993. "Minimum MSE estimation of a regression model with fixed effects from a series of cross-sections," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 125-136, September.
    2. Heckman, James J. & Lochner, Lance J. & Todd, Petra E., 2006. "Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 1, chapter 7, pages 307-458, Elsevier.
    3. Richard Blundell & Lorraine Dearden & Barbara Sianesi, 2003. "Evaluating the impact of education on earnings in the UK: Models, methods and results from the NCDS," IFS Working Papers W03/20, Institute for Fiscal Studies.
    4. Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sam Jones & Thomas Pave Sohnesen & Neda Trifkovic, 2023. "Educational expansion and shifting private returns to education: Evidence from Mozambique," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1407-1428, August.
    2. Kumara, Ajantha Sisira, 2015. "Wage Differentials in Sri Lanka: The case of a post-conflict country with a free education policy," MPRA Paper 68068, University Library of Munich, Germany, revised 25 Nov 2015.
    3. Ali Reza Oryoie & Atiyeh Vahidmanesh, 2022. "The Rate of Return to Education in Iran," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 813-829, June.
    4. Tanthaka Vivatsurakit & Jessica Vechbanyongratana, 2020. "Returns to education among the informally employed in Thailand," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 34(1), pages 26-43, May.
    5. Muhammad Nauman Malik & Masood Sarwar Awan, 2016. "Analysing Econometric Bias and Non-linearity in Returns to Education of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 55(4), pages 837-851.
    6. Himaz, Rozana & Aturupane, Harsha, 2021. "Why are boys falling behind? Explaining gender gaps in school attainment in Sri Lanka," World Development, Elsevier, vol. 142(C).
    7. Dai Binh Tran & Sasiwimon Warunsiri Paweenawat, 2023. "The returns to education and wage penalty from overeducation: New evidence from Vietnam," Bulletin of Economic Research, Wiley Blackwell, vol. 75(4), pages 1267-1290, October.
    8. Saule Kemelbayeva, 2020. "Returns to schooling in Kazakhstan: an update using a pseudo-panel approach," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 10(3), pages 437-487, September.
    9. Kengo Igei, 2018. "Managing Were the Adverse Effects of Disability on Employment Mitigated during 2002-2015 in South Africa?: A Pseudo-Panel Approach," Working Papers 168, JICA Research Institute.
    10. Rumman Khan, 2018. "Assessing cohort aggregation to minimise bias in pseudo-panels," Discussion Papers 2018-01, University of Nottingham, CREDIT.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gernandt, Johannes & Maier, Michael & Pfeiffer, Friedhelm & Rat-Wirtzler, Julie, 2006. "Distributional effects of the high school degree in Germany," ZEW Discussion Papers 06-088, ZEW - Leibniz Centre for European Economic Research.
    2. Verbeek, Marno & Vella, Francis, 2005. "Estimating dynamic models from repeated cross-sections," Journal of Econometrics, Elsevier, vol. 127(1), pages 83-102, July.
    3. Hippolyte d’Albis & Ikpidi Badji, 2017. "Intergenerational inequalities in standards of living in France," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 491-492, pages 71-92.
    4. Sonja Fagernäs, 2010. "Labor Law, Judicial Efficiency, and Informal Employment in India," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 7(2), pages 282-321, June.
    5. Hippolyte d'Albis & Ikpidi Badji, 2017. "Les inégalités de niveaux de vie entre les générations en France," PSE-Ecole d'économie de Paris (Postprint) halshs-01524882, HAL.
    6. Xavier d'Haultfoeuille & Stefan Hoderlein & Yuya Sasaki, 2013. "Nonlinear difference-in-differences in repeated cross sections with continuous treatments," CeMMAP working papers CWP40/13, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    7. Mathilde Aubouin, 2023. "Determinants of the Digital Divide: Evidence from France," Annals of Economics and Statistics, GENES, issue 151, pages 37-80.
    8. Mora, Jhon James & Muro, Juan, 2014. "Consistent estimation in pseudo panels in the presence of selection bias," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 8, pages 1-25.
    9. D. Lederman & W.F. Maloney & J. Messina, 2011. "The Fall of Wage Flexibility," World Bank Publications - Reports 23575, The World Bank Group.
    10. Balcazar Salazar,Carlos Felipe, 2015. "Long-run effects of democracy on income inequality : evidence from repeated cross-sections," Policy Research Working Paper Series 7153, The World Bank.
    11. Beatriz Muriel & Horacio Vera, 2015. "The Effects of Economic Growth on Earnings in Bolivia," Development Research Working Paper Series 08/2015, Institute for Advanced Development Studies.
    12. François Gardes & Greg J, Duncan & Patrice Gaubert & Christophe Starzec, 2002. "Panel and Pseudo-Panel Estimation of Cross-Sectional and Time Series Elasticities of Food Consumption : The Case of American and Polish Data," Working Papers 2002-02, Center for Research in Economics and Statistics.
    13. Paul A. Bekker & Jan van der Ploeg, 2000. "Instrumental Variable Estimation Based on Grouped Data," Econometric Society World Congress 2000 Contributed Papers 1862, Econometric Society.
    14. Tiziana Laureti, 2014. "Life satisfaction and environmental conditions in Italy: a pseudo-panel approach," Discussion Papers 2014/192, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    15. Xin Xu & Jayachandran N Variyam & Zhenxiang Zhao & Frank J Chaloupka, 2014. "Relative Food Prices and Obesity in U.S. Metropolitan Areas: 1976-2001," PLOS ONE, Public Library of Science, vol. 9(12), pages 1-22, December.
    16. Paquet, Marie-France & Bolduc, Denis, 2004. "Le problème des données longitudinales incomplètes : une nouvelle approche," L'Actualité Economique, Société Canadienne de Science Economique, vol. 80(2), pages 341-361, Juin-Sept.
    17. Devereux, Paul J., 2007. "Improved Errors-in-Variables Estimators for Grouped Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 25, pages 278-287, July.
    18. Grit Muehler & Michael Beckmann & Bernd Schauenberg, 2007. "The returns to continuous training in Germany: new evidence from propensity score matching estimators," Review of Managerial Science, Springer, vol. 1(3), pages 209-235, November.
    19. Juarez-Torres, Miriam, 2015. "The Impact of Food Price Shocks on Consumption and Nutritional Patterns of Urban Mexican Households," 2015 Conference, August 9-14, 2015, Milan, Italy 211818, International Association of Agricultural Economists.
    20. Jamal, Haroon, 2015. "Private Returns to Education in Pakistan: A Statistical Investigation," MPRA Paper 70640, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • I00 - Health, Education, and Welfare - - General - - - General
    • I20 - Health, Education, and Welfare - - Education - - - General
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:edecon:v:24:y:2016:i:3:p:300-311. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CEDE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.