IDEAS home Printed from https://ideas.repec.org/a/emx/esteco/v32y2017i1p27-63.html

Decreasing returns to schooling in Mexico

Author

Listed:
  • Cinthya G. Caamal Olvera

    (Universidad Autónoma de Nuevo León)

Abstract

The aim of this paper is to study the relationship between a growing better educated labour force in Mexico and labour market reward. The paper provides robust estimates of the returns to education, dealing with the ability and selectivity biases using parametric, semi-parametric, and semi-nonparametric methods. The empirical strategy allows comparing the returns to education across quantiles to analyse the inequality variations within the conditional wage distribution over time. Data reveal a declining trend in the returns to education over time. Results also indicate that the inequality between the top and lower quantiles has been reduced.

Suggested Citation

  • Cinthya G. Caamal Olvera, 2017. "Decreasing returns to schooling in Mexico," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 32(1), pages 27-63.
    • Handle: RePEc:emx:esteco:v:32:y:2017:i:1:p:27-63
    as

    Download full text from publisher

    File URL: https://estudioseconomicos.colmex.mx/index.php/economicos/article/view/2/2
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Joshua D. Angrist & Alan B. Keueger, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 979-1014.
    2. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66(4), pages 281-281.
    3. Tracy L. Regan & Ronald L. Oaxaca & Galen Burghardt, 2007. "A Human Capital Model Of The Effects Of Ability And Family Background On Optimal Schooling Levels," Economic Inquiry, Western Economic Association International, vol. 45(4), pages 721-738, October.
    4. Newey, Whitney K. & Powell, James L., 1990. "Efficient Estimation of Linear and Type I Censored Regression Models Under Conditional Quantile Restrictions," Econometric Theory, Cambridge University Press, vol. 6(3), pages 295-317, September.
    5. Gallant, A Ronald & Nychka, Douglas W, 1987. "Semi-nonparametric Maximum Likelihood Estimation," Econometrica, Econometric Society, vol. 55(2), pages 363-390, March.
    6. Gronau, Reuben, 1974. "Wage Comparisons-A Selectivity Bias," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1119-1143, Nov.-Dec..
    7. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    8. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
    9. Murphy, Kevin M & Welch, Finis, 1990. "Empirical Age-Earnings Profiles," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 202-229, April.
    10. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, vol. 84(5), pages 1157-1173, December.
    11. Giuseppe De Luca & Valeria Perotti, 2011. "Estimation of ordered response models with sample selection," Stata Journal, StataCorp LLC, vol. 11(2), pages 213-239, June.
    12. Gerfin, Michael, 1996. "Parametric and Semi-parametric Estimation of the Binary Response Model of Labor Market Participation," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(3), pages 321-339, May-June.
    13. Omar Arias & Walter Sosa-Escudero & Kevin F. Hallock, 2001. "Individual heterogeneity in the returns to schooling: instrumental variables quantile regression using twins data," Empirical Economics, Springer, vol. 26(1), pages 7-40.
    14. Robertson, Raymond, 2004. "Relative prices and wage inequality: evidence from Mexico," Journal of International Economics, Elsevier, vol. 64(2), pages 387-409, December.
    15. Bernd Fitzenberger & Claudia Kurz, 2003. "New insights on earnings trends across skill groups and industries in West Germany," Empirical Economics, Springer, vol. 28(3), pages 479-514, July.
    16. Ahn, Hyungtaik & Powell, James L., 1993. "Semiparametric estimation of censored selection models with a nonparametric selection mechanism," Journal of Econometrics, Elsevier, vol. 58(1-2), pages 3-29, July.
    17. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
    18. Tracy Regan & Ronald Oaxaca, 2009. "Work experience as a source of specification error in earnings models: implications for gender wage decompositions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(2), pages 463-499, April.
    19. Martins, Pedro S. & Pereira, Pedro T., 2004. "Does education reduce wage inequality? Quantile regression evidence from 16 countries," Labour Economics, Elsevier, vol. 11(3), pages 355-371, June.
    20. James Heckman, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    21. Gerardo Esquivel, 2011. "The Dynamics of Income Inequality in Mexico since NAFTA," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2011), pages 155-188.
    22. Lopez-Acevedo, Gladys, 2006. "Mexico : two decades of the evolution of education and inequality," Policy Research Working Paper Series 3919, The World Bank.
    23. Moshe Buchinsky, 1998. "Recent Advances in Quantile Regression Models: A Practical Guideline for Empirical Research," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 88-126.
    24. Klein, Roger W & Spady, Richard H, 1993. "An Efficient Semiparametric Estimator for Binary Response Models," Econometrica, Econometric Society, vol. 61(2), pages 387-421, March.
    25. Donald W. K. Andrews & Marcia M. A. Schafgans, 1998. "Semiparametric Estimation of the Intercept of a Sample Selection Model," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 65(3), pages 497-517.
    26. Flabbi, Luca & Paternostro, Stefano & Tiongson, Erwin R., 2008. "Returns to education in the economic transition: A systematic assessment using comparable data," Economics of Education Review, Elsevier, vol. 27(6), pages 724-740, December.
    27. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863, Elsevier.
    28. Andrew Weiss, 1995. "Human Capital vs. Signalling Explanations of Wages," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 133-154, Fall.
    29. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75(4), pages 352-352.
    30. Paolo Naticchioni & Andrea Ricci & Emiliano Rustichelli, 2010. "Far away from a skill-biased change: falling educational wage premia in Italy," Applied Economics, Taylor & Francis Journals, vol. 42(26), pages 3383-3400.
    31. Fersterer, Josef & Winter-Ebmer, Rudolf, 2003. "Are Austrian returns to education falling over time?," Labour Economics, Elsevier, vol. 10(1), pages 73-89, February.
    32. Keane, Michael P & Wolpin, Kenneth I, 1997. "The Career Decisions of Young Men," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 473-522, June.
    33. Maria Fraga O. Martins, 2001. "Parametric and semiparametric estimation of sample selection models: an empirical application to the female labour force in Portugal," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(1), pages 23-39.
    34. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    35. Roger Koenker & Kevin F. Hallock, 2001. "Quantile Regression," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 143-156, Fall.
    36. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    37. Giuseppe De Luca, 2008. "SNP and SML estimation of univariate and bivariate binary-choice models," Stata Journal, StataCorp LLC, vol. 8(2), pages 190-220, June.
    38. José A. F. Machado & José Mata, 2001. "Earning functions in Portugal 1982-1994: Evidence from quantile regressions," Empirical Economics, Springer, vol. 26(1), pages 115-134.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. González Amador, Michelle & Cowan, Robin & Nillesen, Eleonora, 2022. "Peer networks and malleability of educational aspirations," MERIT Working Papers 2022-028, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Avinno Faruk, 2021. "Analysing the glass ceiling and sticky floor effects in Bangladesh: evidence, extent and elements," SN Business & Economics, Springer, vol. 1(9), pages 1-23, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Angel de la Fuente & Antonio Ciccone, 2003. "Human capital in a global and knowledge-based economy," UFAE and IAE Working Papers 562.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    2. Denis Maguain, 2007. "Les rendements de l'éducation en comparaison internationale," Economie & Prévision, La Documentation Française, vol. 0(4), pages 87-106.
    3. Huber, Martin & Melly, Blaise, 2011. "Quantile Regression in the Presence of Sample Selection," Economics Working Paper Series 1109, University of St. Gallen, School of Economics and Political Science.
    4. James J. Heckman & Lance J. Lochner & Petra E. Todd, 2003. "Fifty Years of Mincer Earnings Regressions," NBER Working Papers 9732, National Bureau of Economic Research, Inc.
    5. Daeheon Choi & Chune Young Chung & Ha Truong, 2019. "Return on Education in Two Major Vietnamese Cities," Sustainability, MDPI, vol. 11(18), pages 1-30, September.
    6. Polachek, Solomon W., 2008. "Earnings Over the Life Cycle: The Mincer Earnings Function and Its Applications," Foundations and Trends(R) in Microeconomics, now publishers, vol. 4(3), pages 165-272, April.
    7. Corrado Andini, 2022. "Tertiary education for all and wage inequality: policy insights from quantile regression," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 50(6), pages 1281-1296, November.
    8. Ge, Suqin, 2013. "Estimating the returns to schooling: Implications from a dynamic discrete choice model," Labour Economics, Elsevier, vol. 20(C), pages 92-105.
    9. Corrado Andini, 2010. "A dynamic Mincer equation with an application to Portuguese data," Applied Economics, Taylor & Francis Journals, vol. 42(16), pages 2091-2098.
    10. Ben-Halima, B. & Chusseau, N. & Hellier, J., 2014. "Skill premia and intergenerational education mobility: The French case," Economics of Education Review, Elsevier, vol. 39(C), pages 50-64.
    11. Mirjam van Praag & Arjen van Witteloostuijn & Justin van der Sluis, 2009. "Returns for Entrepreneurs versus Employees: The Effect of Education and Personal Control on the Relative Performance of Entrepreneurs vis-a-vis Wage Employees," Tinbergen Institute Discussion Papers 09-111/3, Tinbergen Institute.
    12. César Edinho Del Pozo Loayza, 2018. "Efectos de la Desregulación del Sistema Universitario en el Mercado Laboral en Perú," CEDLAS, Working Papers 0235, CEDLAS, Universidad Nacional de La Plata.
    13. Jörg Schwiebert, 2015. "Estimation and interpretation of a Heckman selection model with endogenous covariates," Empirical Economics, Springer, vol. 49(2), pages 675-703, September.
    14. Caamal Olvera, Cinthya G., 2013. "Effects of manufacturing dynamics on returns to education in the North of Mexico," MPRA Paper 55211, University Library of Munich, Germany.
    15. Justin L. Tobias & Mingliang Li, 2004. "Returns to Schooling and Bayesian Model Averaging: A Union of Two Literatures," Journal of Economic Surveys, Wiley Blackwell, vol. 18(2), pages 153-180, April.
    16. Belzil, Christian, 2007. "The return to schooling in structural dynamic models: a survey," European Economic Review, Elsevier, vol. 51(5), pages 1059-1105, July.
    17. Chaitali Sinha, 2014. "Human Capital and Public Policy," South Asian Journal of Macroeconomics and Public Finance, , vol. 3(1), pages 79-125, June.
    18. Andersson, Roland & Nabavi Larijani, Pardis & Wilhelmsson, Mats, 2013. "The impact of vocational education and training on income in Sweden," Working Paper Series 13/4, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    19. Fernández-Sainz, Ana I. & Rodríguez-Póo, Juan M., 2010. "An Empirical Investigation of Parametric and Semiparametric Estimation Methods in Sample Selection Models = Investigación empírica de métodos de estimación paramétricos y semiparamétricos de modelos d," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 10(1), pages 99-120, December.
    20. van Praag, Mirjam C. & van Witteloostuijn, Arjen & van der Sluis, Justin, 2009. "Returns for Entrepreneurs vs. Employees: The Effect of Education and Personal Control on the Relative Performance of Entrepreneurs vs. Wage Employees," IZA Discussion Papers 4628, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:emx:esteco:v:32:y:2017:i:1:p:27-63. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ximena Varela (email available below). General contact details of provider: https://edirc.repec.org/data/cecolmx.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.