Why Do Schooling Returns Differ? Screening, Private Schools, and Labor Markets in the Philippines and Thailand
This article examines returns to schooling in the Philippines and Thailand, using recent employee surveys in manufacturing industries. Empirical results show that (i) schooling returns steadily increase as education attainment increases in Thailand, but the returns increase only at university level in the Philippines, and that (ii) private school premiums are higher in the Philippines than Thailand. The latter finding is consistent with the dominance of private institutions in the Philippine education system. The premiums from private schooling investments in the Philippines are, however, found to be spurious in the sense that private schools screen high ability students, which augments wage. Therefore, the productivity gain from private schooling is small.
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