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Disaggregating rates of return to education

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  • Khan, Shahrukh R.
  • Mohammad, Irfan

Abstract

Education is effectively used as a discontinuous variable in studies estimating the rates of return by level of education. We find that the normal procedure used for estimating the rate of return to broad aggregates such as secondary and high understates the returns to these levels and subsequently suggest a procedure for rectifying this bias. We also find, as expected, that broad aggregations that ignore sub-levels of education result in a loss of important insights about the interaction of education and the labor market.

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File URL: http://mpra.ub.uni-muenchen.de/39208/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 39208.

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Date of creation: 1990
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Handle: RePEc:pra:mprapa:39208

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Keywords: Estimating the rates of return; Education; Labor Market;

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  1. George Psacharopoulos, 1985. "Returns to Education: A Further International Update and Implications," Journal of Human Resources, University of Wisconsin Press, vol. 20(4), pages 583-604.
  2. Shahnaz Kazi & Zeba A. Sathar, 1985. "Differences in Household Characteristics by Income Distribution in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 24(3-4), pages 657-669.
  3. Boissiere, M & Knight, J B & Sabot, R H, 1985. "Earnings, Schooling, Ability, and Cognitive Skills," American Economic Review, American Economic Association, vol. 75(5), pages 1016-30, December.
  4. Hungerford, Thomas & Solon, Gary, 1987. "Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 175-77, February.
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