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Estimating the returns to education : accounting for heterogeneity in ability

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  • Patrinos, Harry Anthony
  • Ridao-Cano, Cris
  • Sakellariou, Chris

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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Bibliographic Info

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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References

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Citations

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Cited by:
  1. Wang, Le, 2011. "How Does Education Affect the Earnings Distribution in Urban China?," IZA Discussion Papers 6173, Institute for the Study of Labor (IZA).
  2. Eduardo A. Cavallo & Patricio Valenzuela & Eduardo Borensztein, 2007. "Debt Sustainability under Catastrophic Risk: The Case for Government Budget Insurance," Research Department Publications, Inter-American Development Bank, Research Department 4522, Inter-American Development Bank, Research Department.
  3. Marcela Meléndez Arjona & Arturo Harker, 2008. "Revisiting Economic Growth in Colombia: A Microeconomic Perspective," IDB Publications 45218, Inter-American Development Bank.
  4. Barry Bosworth & Susan M. Collins & Arvind Virmani, 2006. "Sources of Growth in the Indian Economy," India Policy Forum, Global Economy and Development Program, The Brookings Institution, Global Economy and Development Program, The Brookings Institution, vol. 3(1), pages 1-69.
  5. 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).
  6. Neil Kendrick, 2013. "Educação para todos –“free to those who can afford it”: human capital and inequality persistence in 21st c Brazil," Economic History Working Papers, London School of Economics and Political Science, Department of Economic History 50970, London School of Economics and Political Science, Department of Economic History.
  7. Driouchi, Ahmed & Zouag, Nada, 2010. "Internal Mobility and Likelihood of Skill Losses in Localities of Emigration: Theory and Preliminary Empirical Application to Some Developing Economies," MPRA Paper 21799, University Library of Munich, Germany, revised 01 Apr 2010.
  8. Simona Grassi & Ching-to Ma, 2010. "Subsidy design: wealth versus benefits," Journal of Economics, Springer, Springer, vol. 101(1), pages 49-72, September.
  9. Stefan Gravemeyer & Thomas Gries, 2010. "Income and disparity in Germany and China," Working Papers CIE 30, University of Paderborn, CIE Center for International Economics.

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