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Returns to Private Education in Peru

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Author Info

  • Calónico, Sebastián

    ()
    (University of Michigan)

  • Nopo, Hugo

    ()
    (Inter-American Development Bank)

Abstract

The private provision of educational services has been representing an increasing fraction of the Peruvian schooling system, especially in recent last decades. While there have been many claims about the differences in quality between private and public schools, there is no complete assessment of the different impacts of these two type of providers on the labor markets. This paper is an attempt to provide such a comprehensive overview. We explore private-public differences in the individual returns to education in Urban Peru. Exploiting a rich pair of data sets (ENNIV 1997 and 2000) that include questions on type of education (public vs. private) for each educational level (primary, secondary, technical tertiary and university tertiary) to a representative sample of adults we are able to measure the differences in labor earnings for all possible educational trajectories. The results indicate higher returns to education for those who attended private schools than those who attended the public system. Nonetheless, these higher returns also show higher dispersion, reflecting wider quality heterogeneity within the private system. The private-public differences in returns are more pronounced at the secondary than at any other educational level. On the other hand, the private-public differences in returns from technical education are almost non-existent. A cohort approach paired with a rolling-windows technique allows us to capture generational evolutions of the private-public differences. The results indicate that these differences have been increasing during the last two decades.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2711.

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Length: 23 pages
Date of creation: Mar 2007
Date of revision:
Publication status: published as 'Where Did You Go to School? Private-Public Differences in Schooling Trajectories and Their Role on Earnings' in: Well-Being and Social Policy, 2007, 3 (1), 25-46
Handle: RePEc:iza:izadps:dp2711

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Keywords: returns to schooling; wages;

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References

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  1. Joshua Angrist & Alan Krueger, 1998. "Empirical Strategies in Labor Economics," Working papers 98-7, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Jaime Saavedra & Pablo Suarez, 2002. "El financiamiento de la educación pública en el Perú: el rol de las familias," Documentos de Investigación, Grupo de Análisis para el Desarrollo (GRADE) dt38, Grupo de Análisis para el Desarrollo (GRADE).
  3. David Card & Alan Krueger, 1996. "School Resources and Student Outcomes: An Overview of the Literature and New Evidence from North and South Carolina," Working Papers 745, Princeton University, Department of Economics, Industrial Relations Section..
  4. Caroline Minter Hoxby, 1994. "Do Private Schools Provide Competition for Public Schools?," NBER Working Papers 4978, National Bureau of Economic Research, Inc.
  5. Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers 0151, National Bureau of Economic Research, Inc.
  6. Jaeger, David A & Page, Marianne E, 1996. "Degrees Matter: New Evidence on Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 733-40, November.
  7. Norbert R. Schady, 2003. "Convexity and Sheepskin Effects in the Human Capital Earnings Function: Recent Evidence for Filipino Men," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(2), pages 171-196, 05.
  8. Chang-Tai Hsieh & Miguel Urquiola, 2003. "When Schools Compete, How Do They Compete? An Assessment of Chile's Nationwide School Voucher Program," NBER Working Papers 10008, National Bureau of Economic Research, Inc.
  9. José Rodríguez, 1993. "Retornos económicos de la educación en el Perú ," Documentos de Trabajo, Departamento de Economía - Pontificia Universidad Católica del Perú 1993-112, Departamento de Economía - Pontificia Universidad Católica del Perú.
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  11. Park, Jin Heum, 1999. "Estimation of sheepskin effects using the old and the new measures of educational attainment in the Current Population Survey," Economics Letters, Elsevier, vol. 62(2), pages 237-240, February.
  12. Wright, Robert E., 1999. "The Rate of Return to Private Schooling," IZA Discussion Papers 92, Institute for the Study of Labor (IZA).
  13. David Card & Alan Krueger, 1994. "The Economic Return to School Quality: A Partial Survey," Working Papers 713, Princeton University, Department of Economics, Industrial Relations Section..
  14. repec:fth:prinin:334 is not listed on IDEAS
  15. Lorraine Dearden & Barbara Sianesi, 2001. "Estimating the Returns to Education: Models, Methods and Results," CEE Discussion Papers, Centre for the Economics of Education, LSE 0016, Centre for the Economics of Education, LSE.
  16. World Bank, 2001. "Peruvian Education at a Crossroads : Challenges and Opportunities for the 21st Century," World Bank Publications, The World Bank, number 13948.
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  18. Andrea Tokman Ramos, 2002. "Is Private Education Better? Evidence from Chile," Working Papers Central Bank of Chile, Central Bank of Chile 147, Central Bank of Chile.
  19. Dante Contreras, 2002. "Vouchers, School Choice and the Access to Higher Education," Working Papers, Economic Growth Center, Yale University 845, Economic Growth Center, Yale University.
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