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Returns for Education in Kosovo: Estimates of Wage and Employment Premia

Author

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  • Hoti Avdullah

    (Faculty of Economy, University of Prishtina)

Abstract

This paper provides an analysis of the returns for education in Kosovo using data from a Household and Labour Force Survey. We argue that given the high unemployment rate in Kosovo, employed individuals may not be randomly selected from the labour force. Therefore, the estimates of the rates of returns for education based on the standard Mincerian earnings function may be biased downwards. Hence, the Heckman sample selection model is implemented, which adjusts the estimates of the wage equation for the self-selection of individuals into employment. We estimate the rate of returns for level of education and for years of education. We find relatively low rates of returns for education in terms of wage premia and argue that in countries with chronic labour market disequilibria (such as in Kosovo), the returns for education may be in terms of employment premia. To our knowledge, this is the first systematic study of these issues in this post-socialist and post-conflict economy.

Suggested Citation

  • Hoti Avdullah, 2011. "Returns for Education in Kosovo: Estimates of Wage and Employment Premia," South East European Journal of Economics and Business, Sciendo, vol. 6(1), pages 71-84, April.
    • Handle: RePEc:vrs:seejeb:v:6:y:2011:i:1:p:71-84:n:7
    DOI: 10.2478/v10033-011-0007-x
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    Citations

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    Cited by:

    1. Horie, Norio & Iwasaki, Ichiro & 岩﨑, 一郎, 2022. "Returns to Education in European Emerging Markets: A Meta-Analytic Review," RRC Working Paper Series 95, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
    2. Francesco Pastore & Sarosh Sattar & Erwin Tiongson, 2013. "Gender differences in earnings and labor supply in early career: evidence from Kosovo’s school-to-work transition survey," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-34, December.
    3. Kumo, Kazuhiro, 2015. "Research on Poverty in Transition Economies: A Meta-analysis on Changes in the Determinants of Poverty," RRC Working Paper Series 51, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
    4. Searing, Elizabeth A.M. & Rios-Avila, Fernando & Lecy, Jesse D., 2013. "The impact of psychological trauma on wages in post-conflict Bosnia and Herzegovina," Social Science & Medicine, Elsevier, vol. 96(C), pages 165-173.
    5. Ukaj MIC & Mustafa Topxhiu RAHMIJE, 2019. "The returns to investment in education: Some theoretical and empirical insights," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 193-203.
    6. Fadil Sahiti & Helen Lawton Smith, 2017. "An application of growth diagnostics on the growth of firms: with evidence from Kosovo firms," Journal of Innovation and Entrepreneurship, Springer, vol. 6(1), pages 1-24, December.

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