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Estimating the returns to education : accounting for heterogeneity in ability

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Author Info
Patrinos, Harry Anthony
Ridao-Cano, Cris
Sakellariou, Chris

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Abstract

Typically estimates of the benefits of education investments show average private rates of return for the average individual. The average may not be useful for policy. An examination of the distribution of the returns across individuals is needed. The few studies that have examined these patterns focus on high-income countries, showing investments to be more profitable at the top of the income distribution. The implication is that investments may increase inequality. Extending the analysis to 16 East Asian and Latin American countries the authors observe mixed evidence in middle-income countries and decreasing returns in low-income countries. Such differences between countries could be due to more job mobility in industrial countries, scarcity of skills, or differential exposure to market forces.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4040.

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Date of creation: 01 Oct 2006
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Handle: RePEc:wbk:wbrwps:4040

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Keywords: Access&Equity in Basic Education; Education For All; Teaching and Learning; Primary Education; Education and Society; Economics of Education;

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Barry Bosworth & Susan M. Collins & Arvind Virmani, 2007. "Sources of Growth in the Indian Economy," NBER Working Papers 12901, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Eduardo Borensztein & Eduardo A. Cavallo & Patricio Valenzuela, 2008. "Debt Sustainability Under Catastrophic Risk: The Case for Government Budget Insurance," RES Working Papers 2011, Inter-American Development Bank, Research Department. [Downloadable!]
    Other versions:
  3. Gonzales, Naihobe & Uwaifo Oyelere, Ruth, 2009. "Are Returns to Education on the Decline in Venezuela and Does Mission Sucre Have a Role to Play?," IZA Discussion Papers 4206, Institute for the Study of Labor (IZA). [Downloadable!]
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