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“Double Penalty in Returns to Education: Informality and Educational Mismatch in the Colombian Labour market”

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  • Paula Herrera

    ()
    (Faculty of Economics, University of Barcelona)

  • Enrique López-Bazo

    ()
    (Faculty of Economics, University of Barcelona)

  • Elisabet Motellón

    ()
    (Faculty of Economics, University of Barcelona)

Abstract

This paper examines the returns to education taking into consideration the existence of educational mismatches in the formal and informal employment of a developing country. Results show that the returns of surplus, required and deficit years of schooling are different in the two sectors. Moreover, they suggest that these returns vary along the wage distribution, and that the pattern of variation differs for formal and informal workers. In particular, informal workers face not only lower returns to their education, but suffer a second penalty associated with educational mismatches that puts them at a greater disadvantage compare to their formal counterparts.

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Bibliographic Info

Paper provided by University of Barcelona, Regional Quantitative Analysis Group in its series AQR Working Papers with number 201304.

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Length: 32 pages
Date of creation: May 2013
Date of revision: May 2013
Handle: RePEc:aqr:wpaper:201304

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Keywords: Educational Mismatch; Formal/Informal Employment; Economic Development; Wage Gap. JEL classification: O17; J21; J24.;

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