Returns to Education in Sri Lanka: A Pseudo Panel Approach
AbstractThis study employs the pseudo-panel approach to estimate returns to education among income earners in Sri Lanka.� Pseudo-panel data are constructed from nine repreated cross-sections of Sri Lankaâ€™s Labor Force Survey data from 1997-2008 for workers born during 1953-1974.� The results show that for males, one extra year of education increases monthly earnings by about 5 per cent using the pseudo panel estimation rather than 8 per cent as in the OLS estimation.� This indicates that not controlling for unobservables such as ability and motivation bias the OLS estimation of returns upwards by about 3 per cent on average.� It also suggests that males with higher ability seem to be acquiring more years of education contrary to what has been observed recently in countries such as Thailand (Warunsiri and McKnown 2010) where the opportunity cost of education seems to be high.
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Bibliographic InfoPaper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 615.
Date of creation: 02 Jul 2012
Date of revision:
Sri Lanka; Education; Returns; Pseudo panels; Synthetic cohorts;
Find related papers by JEL classification:
- I00 - Health, Education, and Welfare - - General - - - General
- I20 - Health, Education, and Welfare - - Education - - - General
- I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-23 (All new papers)
- NEP-LAB-2012-07-23 (Labour Economics)
- NEP-LMA-2012-07-23 (Labor Markets - Supply, Demand, & Wages)
- NEP-SEA-2012-07-23 (South East Asia)
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