IDEAS home Printed from https://ideas.repec.org/p/hst/ghsdps/gd09-080.html
   My bibliography  Save this paper

Education and Its Distributional Impacts on Living Standards

Author

Listed:
  • Takahiro Ito

Abstract

This paper investigates the determinants of living standards (measured by per capita consumption expenditure) at the household level, addressing heterogeneity in returns to education and endogeneity of educational status. The estimation results obtained through an instrumental variables quantile regression suggest that the endogeneity of education matters in determining the causal effect of education on living standards, while no evidence of the heterogeneity in the rate of returns to education is found. However, the results also provide evidence that impacts of other determinants vary significantly over the outcome (expenditure) distribution, and consequently a simulation based on the results shows that poverty alleviation impacts of education differs substantially between the instrumental variables quantile regression and standard instrumental variables regression results. The comparison of the two indicates the possibility that the impact on poverty reduction is likely to be overestimated in the standard instrumental variable regression.

Suggested Citation

  • Takahiro Ito, 2009. "Education and Its Distributional Impacts on Living Standards," Global COE Hi-Stat Discussion Paper Series gd09-080, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hst:ghsdps:gd09-080
    as

    Download full text from publisher

    File URL: http://gcoe.ier.hit-u.ac.jp/research/discussion/2008/pdf/gd09-080.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Datt, Gaurav & Jolliffe, Dean, 2005. "Poverty in Egypt: Modeling and Policy Simulations," Economic Development and Cultural Change, University of Chicago Press, vol. 53(2), pages 327-346, January.
    2. P. Duraisamy, 2000. "Changes in Returns to Education in India, 1983-94: By Gender, Age-Cohort and Location," Working Papers 815, Economic Growth Center, Yale University.
    3. Jolliffe, Dean, 2002. "Whose Education Matters in the Determination of Household Income? Evidence from a Developing Country," Economic Development and Cultural Change, University of Chicago Press, vol. 50(2), pages 287-312, January.
    4. Omar Arias & Kevin F. Hallock & Walter Sosa Escudero, 1999. "Individual Heterogeneity in the Returns to Schooling: Instrumental Variables Quantile Regression using Twins Data," Department of Economics, Working Papers 016, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.
    5. Victor Chernozhukov & Christian Hansen, 2005. "An IV Model of Quantile Treatment Effects," Econometrica, Econometric Society, vol. 73(1), pages 245-261, January.
    6. Yang, Dennis Tao, 1997. "Education and Off-Farm Work," Economic Development and Cultural Change, University of Chicago Press, vol. 45(3), pages 613-632, April.
    7. Abhijit Banerjee & Lakshmi Iyer & Rohini Somanathan, 2005. "History, Social Divisions, and Public Goods in Rural India," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 639-647, 04/05.
    8. Geeta Gandhi Kingdon, 1997. "Does the Labour Market Explain Lower Female Schooling in India?," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 01, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    9. Geeta Gandhi Kingdon, 1998. "Does the labour market explain lower female schooling in India?," Journal of Development Studies, Taylor & Francis Journals, vol. 35(1), pages 39-65.
    10. Ito, Takahiro, 2009. "Caste discrimination and transaction costs in the labor market: Evidence from rural North India," Journal of Development Economics, Elsevier, pages 292-300.
    11. Wooldridge, Jeffrey M., 1997. "On two stage least squares estimation of the average treatment effect in a random coefficient model," Economics Letters, Elsevier, vol. 56(2), pages 129-133, October.
    12. Behrman, Jere R & Knowles, James C, 1999. "Household Income and Child Schooling in Vietnam," World Bank Economic Review, World Bank Group, vol. 13(2), pages 211-256, May.
    13. Takahiro Ito, 2007. "Caste Discrimination and Transaction Costs in the Labor Market: Evidence from Rural North India," Hi-Stat Discussion Paper Series d06-200, Institute of Economic Research, Hitotsubashi University.
    14. Duraisamy, P., 2002. "Changes in returns to education in India, 1983-94: by gender, age-cohort and location," Economics of Education Review, Elsevier, vol. 21(6), pages 609-622, December.
    15. 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, pages 7-40.
    16. Puja Vasudeva Dutta, 2006. "Returns to Education: New Evidence for India, 1983-1999," Education Economics, Taylor & Francis Journals, pages 431-451.
    17. Chernozhukov, Victor & Hansen, Christian, 2006. "Instrumental quantile regression inference for structural and treatment effect models," Journal of Econometrics, Elsevier, pages 491-525.
    18. Duraisamy, P., 2000. "Changes in Returns to Education in India, 1983-94: By Gender, Age-Cohort and Location," Papers 815, Yale - Economic Growth Center.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    poverty; heterogeneous returns to education; instrumental variables quantile regression;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:hst:ghsdps:gd09-080. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tatsuji Makino). General contact details of provider: http://edirc.repec.org/data/iehitjp.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.