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La elección del sector laboral y los retornos a la educación en Guatemala
[Labour Sector Choice and the Returns to Education in Guatemala]

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  • Alejos, Luis Alejandro

Abstract

This paper estimates the returns to education in Guatemala, while attempting to account for self-employment and the presence of workers without monetary earnings in the economy, factors whose omission can potentially lead to sample selection bias. The analysis uses data from the Survey of Living Conditions (ENCOVI 2000) to obtain estimates of the rate of returns to different levels of schooling using a human capital earnings function. A multinomial logit model for sector choice is implemented to correct for selection bias as in Bourguignon, Fournier and Gurgand (2001). Non-linearities in the returns to education are strongly supported by the empirical results. It is found that OLS estimates which do not account for sector choice significantly overestimate the returns to primary and early secondary schooling, while underestimating the returns to late secondary education. The results also show lower rates of return in the self-employment sector and that workers who only complete primary or early secondary schooling have a higher probability of entering this sector.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 42756.

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Date of creation: 2006
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Handle: RePEc:pra:mprapa:42756

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Keywords: returns to education; self-employment; unpaid work;

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References

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  1. Alan Krueger & Orley Ashenfelter, 1992. "Estimates of the Economic Return to Schooling from a New Sample of Twins," NBER Working Papers 4143, National Bureau of Economic Research, Inc.
  2. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, Econometric Society, vol. 47(1), pages 153-61, January.
  3. Harry Anthony Patrinos, 1996. "Non-linearities in the returns to education: sheepskin effects or threshold levels of human capital?," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 3(3), pages 171-173.
  4. Gaston, Noel & Tenjo, Jaime, 1992. "Educational Attainment and Earnings Determination in Colombia," Economic Development and Cultural Change, University of Chicago Press, vol. 41(1), pages 125-39, October.
  5. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, Econometric Society, vol. 69(5), pages 1127-60, September.
  6. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, Econometric Society, vol. 51(2), pages 507-12, March.
  7. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, Econometric Society, vol. 45(1), pages 1-22, January.
  8. Barry Chiswick, 2003. "Jacob Mincer, Experience and the Distribution of Earnings," Review of Economics of the Household, Springer, Springer, vol. 1(4), pages 343-361, December.
  9. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  10. Psacharopoulos, George, 1996. "A reply to Bennell," World Development, Elsevier, Elsevier, vol. 24(1), pages 201-201, January.
  11. Williams, Donald R., 2002. "Returns to education and experience in self-employment: Evidence from Germany," IRISS Working Paper Series, IRISS at CEPS/INSTEAD 2002-04, IRISS at CEPS/INSTEAD.
  12. Bennell, Paul, 1996. "Rates of return to education: Does the conventional pattern prevail in sub-Saharan Africa?," World Development, Elsevier, Elsevier, vol. 24(1), pages 183-199, January.
  13. Heckman, James J. & Lochner, Lance John & Todd, Petra E., 2003. "Fifty Years of Mincer Earnings Regressions," IZA Discussion Papers 775, Institute for the Study of Labor (IZA).
  14. Loening, Josef L., 2005. "Effects of primary, secondary, and tertiary education on economic growth : evidence from Guatemala," Policy Research Working Paper Series 3610, The World Bank.
  15. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
  16. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 66, pages 281.
  17. Tsung-Ping Chung, 2000. "The Returns to Education and Training: Evidence from the Malaysian Family Life Surveys," Studies in Economics, Department of Economics, University of Kent 0007, Department of Economics, University of Kent.
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