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Average and Marginal Returns to Upper Secondary Schooling in Indonesia

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  • Carneiro, Pedro
  • Lokshin, Michael
  • Ridao-Cano, Cristobal
  • Umapathi, Nithin

Abstract

This paper estimates average and marginal returns to schooling in Indonesia using a non-parametric selection model. Identification of the model is given by exogenous geographic variation in access to upper secondary schools. We find that the return to upper secondary schooling varies widely across individuals: it can be as high as 50 percent per year of schooling for those very likely to enroll in upper secondary schooling, or as low as -10 percent for those very unlikely to do so. Average returns for the student at the margin are well below those for the average student attending upper secondary schooling.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8689.

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Date of creation: Dec 2011
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Handle: RePEc:cpr:ceprdp:8689

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Keywords: average return; Marginal return; marginal treatment effect; Return to Education;

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  1. James Heckman & Pedro Carneiro, 2003. "Human Capital Policy," NBER Working Papers 9495, National Bureau of Economic Research, Inc.
  2. Esther Duflo, 2002. "The Medium Run Effects of Educational Expansion: Evidence from a Large School Construction Program in Indonesia," NBER Working Papers 8710, National Bureau of Economic Research, Inc.
  3. Wang, Xiaojun & Fleisher, Belton M. & Li, Haizheng & Li, Shi, 2007. "Access to Higher Education and Inequality: The Chinese Experiment," IZA Discussion Papers 2823, Institute for the Study of Labor (IZA).
  4. Lorraine Dearden & Leslie McGranahan & Leslie McGranahan & Barbara Sianesi, 2004. "Returns to Education for the Marginal Learner: Evidence from the BCS70," CEE Discussion Papers 0045, Centre for the Economics of Education, LSE.
  5. James J. Heckman & Edward Vytlacil, 2005. "Structural Equations, Treatment Effects, and Econometric Policy Evaluation," Econometrica, Econometric Society, vol. 73(3), pages 669-738, 05.
  6. Bjorklund, Anders & Moffitt, Robert, 1987. "The Estimation of Wage Gains and Welfare Gains in Self-selection," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 42-49, February.
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