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Education, Labour Supply and Market Development in Rural Peru

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  • Sonia Laszlo

    (McGIll)

Abstract

This paper examines the channels through which education affects household earnings in environments where wages are unobserved. Utilizing data from rural Peru, the empirical strategy decomposes the earnings returns to education into various wage-dependent and labour supply parameters. Geographic variation of market development inherent in the Peruvian Andes assists in the identification of unobserved wages. Results indicate that education affects earnings disproportionately more than hours, implying strong wage effects of education. This paper provides evidence that education gives rural households access to better, more lucrative, jobs characterized by fewer hours. This effect is more pronounced in more developed market environments.

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File URL: http://128.118.178.162/eps/dev/papers/0312/0312005.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Development and Comp Systems with number 0312005.

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Length: 44 pages
Date of creation: 17 Dec 2003
Date of revision:
Handle: RePEc:wpa:wuwpdc:0312005

Note: Type of Document - pdf; prepared on WinXP; to print on Dell Laser Printer p1500; pages: 44; figures: No
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Web page: http://128.118.178.162

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Keywords: Returns to Education; Time Allocation; Economic Development;

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Cited by:
  1. Dwayne Benjamin & Loren Brandt & Jia-Zhueng Fan, 2003. "Ceaseless Toil? Health and Labor Supply of the Elderly in Rural China," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan 2003-579, William Davidson Institute at the University of Michigan.

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