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Average and Marginal Returns to Upper Secondary Schooling in Indonesia


  • Carneiro, Pedro
  • Lokshin, Michael
  • Ridao-Cano, Cristobal
  • Umapathi, Nithin


This paper estimates average and marginal returns to schooling in Indonesia using a non-parametric selection model. Identification of the model is given by exogenous geographic variation in access to upper secondary schools. We find that the return to upper secondary schooling varies widely across individuals: it can be as high as 50 percent per year of schooling for those very likely to enroll in upper secondary schooling, or as low as -10 percent for those very unlikely to do so. Average returns for the student at the margin are well below those for the average student attending upper secondary schooling.

Suggested Citation

  • Carneiro, Pedro & Lokshin, Michael & Ridao-Cano, Cristobal & Umapathi, Nithin, 2011. "Average and Marginal Returns to Upper Secondary Schooling in Indonesia," CEPR Discussion Papers 8689, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8689

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    References listed on IDEAS

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    Cited by:

    1. Xinxin Chen & Yaojiang Shi & Hongmei Yi & Linxiu Zhang & Di Mo & James Chu & Prashant Loyalka & Scott Rozelle, 2013. "The impact of a senior high school tuition relief program on poor junior high schoolstudents in rural China," Working Papers PIERI 2013-03, PEP-PIERI.
    2. Radchenko, Natalia, 2014. "Heterogeneity in Informal Salaried Employment: Evidence from the Egyptian Labor Market Survey," World Development, Elsevier, vol. 62(C), pages 169-188.

    More about this item


    average return; Marginal return; marginal treatment effect; Return to Education;

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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