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Regional Differences in Returns to Education in Portugal

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  • Jose Antonio Cabral Vieira

    ()

  • Joao Pedro Couto

    ()

  • Maria Teresa Tiago

    ()

Abstract

This paper analyses differences in the return to education in Portugal across regions. For this purpose, we use an extended Mincer-type wage equation. OLS regression results indicate that differences in the rewards to education are substantially different across regions. In particular, they are much higher in Lisbon than in other regions. Since the average level of education in Lisbon is much higher in Lisbon than elsewhere such a differential is attributed to the fact that the demand for educated labour is much higher in Lisbon, likely due to differences in technology. A quantile regression analysis reveals that the return to education is not constant across the whole conditional wage distribution. This is valid for the 18 regions examined, although once again the impact of education on wages is higher in Lisbon regardless the quantile we examine.

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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa06p44.

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Date of creation: Aug 2006
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Handle: RePEc:wiw:wiwrsa:ersa06p44

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  1. David Card, 1994. "Earnings, Schooling, and Ability Revisited," NBER Working Papers 4832, National Bureau of Economic Research, Inc.
  2. Psacharopoulos, George & Patrinos, Harry Anthony, 2002. "Returns to investment in education : a further update," Policy Research Working Paper Series, The World Bank 2881, The World Bank.
  3. Paulo Madruga & José Vieira, 2004. "Regions and Low-Wage Mobility in Portugal," ERSA conference papers, European Regional Science Association ersa04p55, European Regional Science Association.
  4. Koenker, Roger & Bassett, Gilbert, Jr, 1982. "Robust Tests for Heteroscedasticity Based on Regression Quantiles," Econometrica, Econometric Society, Econometric Society, vol. 50(1), pages 43-61, January.
  5. DuMond J.M. & Hisch, B.T. & Macpherson, D.A., 1996. "Wage Differentials Across Labor Markets and Workers: Does Cost of Living Matter?," Working Papers, Department of Economics, Florida State University 1996_08_01, Department of Economics, Florida State University.
  6. Coen N. Teulings & José A.C. Vieira, 1998. "Urban versus Rural Return to Human Capital in Portugal, A Cook-Book Recipe for Applying Assignment Models," Tinbergen Institute Discussion Papers, Tinbergen Institute 98-095/3, Tinbergen Institute, revised 20 Sep 2002.
  7. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, Econometric Society, vol. 46(1), pages 33-50, January.
  8. Gilles Duranton & Vassilis Monastiriotis, 2002. "Mind the Gaps: The Evolution of Regional Earnings Inequalities in the U.K., 1982-1997," Journal of Regional Science, Wiley Blackwell, Wiley Blackwell, vol. 42(2), pages 219-256.
  9. Mata, Jose & Machado, Jose A. F., 1996. "Firm start-up size: A conditional quantile approach," European Economic Review, Elsevier, Elsevier, vol. 40(6), pages 1305-1323, June.
  10. Fitzenberger, Bernd & Kurz, Claudia, 1997. "New insights on earnings trends across skill groups and industries in West Germany," Discussion Papers, University of Konstanz, Center for International Labor Economics (CILE) 38, University of Konstanz, Center for International Labor Economics (CILE).
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