Self-employment earnings and returns to education in rural Peru
AbstractThis article estimates the returns to education for households who derive part of their income from household based non-farm self-employment ventures in rural Peru. While education is an individual level variable, earnings are observed at the household level. This asymmetry complicates both the estimation and the interpretation of the returns to education. This article is the first jointly to incorporate three channels through which education affects household earnings. Education affects earnings through the marginal productivity of labour (worker effect), labour allocation across activities (between-activity allocative effect) and its production externality effect (spillover effect). The results suggest that the between-activity allocative effects of education dominate the returns. This article also makes novel use of economic geography to proxy for the role that access to markets plays in determining these returns. In particular, altitude is a strong predictor of activity choice and the returns to education in this mountainous country.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Journal of Development Studies.
Volume (Year): 41 (2005)
Issue (Month): 7 ()
Contact details of provider:
Web page: http://www.tandfonline.com/FJDS20
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.:
- Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
- Yang, Dennis T., 1995.
"Education in Production: Measuring Labor Quality and Management,"
95-56, Duke University, Department of Economics.
- Dennis Tao Yang, 1997. "Education in Production: Measuring Labor Quality and Management," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 764-772.
- Chiappori, Pierre-Andre & Haddad, Lawrence & Hoddinott, John & Kanbur, Ravi, 1993.
"Unitary versus collective models of the household : time to shift theburden of proof?,"
Policy Research Working Paper Series
1217, The World Bank.
- Alderman, H. & Chiappori, P.A. & Haddad, L., 1994. "Unitary versus Collective Models of the Household: Time to Shift the Burden of Proof?," DELTA Working Papers 94-17, DELTA (Ecole normale supérieure).
- Chao, John & Swanson, Norman R., 2007.
"Alternative approximations of the bias and MSE of the IV estimator under weak identification with an application to bias correction,"
Journal of Econometrics,
Elsevier, vol. 137(2), pages 515-555, April.
- John C. Chao & Norman Rasmus Swanson, 2004. "Alternative Approximations of the Bias and MSE of the IV Estimator Under Weak Identification with an Application to Bias Correction," Yale School of Management Working Papers ysm375, Yale School of Management.
- John Chao & Norman Swanson, 2003. "Alternative Approximations of the Bias and MSE of the IV Estimator Under Weak Identification With an Application to Bias Correction," Departmental Working Papers 200315, Rutgers University, Department of Economics.
- John Chao & Norman R. Swanson, 2003. "Alternative Approximations of the Bias and MSE of the IV Estimator under Weak Identification with an Application to Bias Correction," Cowles Foundation Discussion Papers 1418, Cowles Foundation for Research in Economics, Yale University.
- Mwangi S. Kimenyi & Germano Mwabu & Damiano Kulundu Manda, 2006.
"Human Capital Externalities and Private Returns to Education in Kenya,"
Eastern Economic Journal,
Eastern Economic Association, vol. 32(3), pages 493-513, Summer.
- Damiano Kulundu Manda & Germano Mwabu & Mwangi S. Kimenyi, 2004. "Human Capital Externalities and Private Returns to Education in Kenya," Working papers 2004-08, University of Connecticut, Department of Economics.
- Vijverberg, Wim P. M., 1995. "Returns to schooling in non-farm self-employment: An econometric case study of Ghana," World Development, Elsevier, vol. 23(7), pages 1215-1227, July.
- Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-46, September.
- Foster, Andrew D & Rosenzweig, Mark R, 1995.
"Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture,"
Journal of Political Economy,
University of Chicago Press, vol. 103(6), pages 1176-1209, December.
- Mark Rosenzweig & Andrew D. Foster, . "Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture," Home Pages _068, University of Pennsylvania.
- Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-27, August.
- Alberto Isgut, 2004. "Non-farm Income and Employment in Rural Honduras: Assessing the Role of Locational Factors," Journal of Development Studies, Taylor & Francis Journals, vol. 40(3), pages 59-86.
- Alderman, Harold, et al, 1995. "Unitary versus Collective Models of the Household: Is It Time to Shift the Burden of Proof?," World Bank Research Observer, World Bank Group, vol. 10(1), pages 1-19, February.
- Basu, Kaushik & Narayan, Ambar & Ravallion, Martin, 2001. "Is literacy shared within households? Theory and evidence for Bangladesh," Labour Economics, Elsevier, vol. 8(6), pages 649-665, December.
- Erik Jonasson & Steven M Helfand, 2008.
"Locational Determinants of Rural Non-agricultural Employment: Evidence From Brazil,"
200802, University of California at Riverside, Department of Economics, revised Jan 2008.
- Jonasson, Erik & Helfand, Steven, 2008. "Locational Determinants of Rural Non-Agricultural Employment: Evidence from Brazil," Working Papers 2008:3, Lund University, Department of Economics.
- Jonasson, Erik & Helfand, Steven M., 2010. "How Important are Locational Characteristics for Rural Non-agricultural Employment? Lessons from Brazil," World Development, Elsevier, vol. 38(5), pages 727-741, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.