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Unbundling Returns to Degrees and Skills: Evidence from Postsecondary Education in Colombia


  • Busso, Matías
  • Muñoz, Juan Sebastián
  • Montaño, Sebastián


This paper shows that returns to education are not enough to capture all the returns to human capital. Using longitudinal data of all college graduates in Colombia, we estimate labor market returns to postsecondary degrees and to various skillsincluding literacy, numeracy, foreign language, field-specific, and non-cognitive skills. Graduates of longer programs, of private institutions, and of schools with higher reputation earn higher wages. Even after controlling for all the characteristics of the degree, a one standard deviation increase in each skill predicts an average wage increase of two percent. Returns to skills vary along the wage distribution, with tenure, with the field of specialization and the type of job obtained immediately after graduation.

Suggested Citation

  • Busso, Matías & Muñoz, Juan Sebastián & Montaño, Sebastián, 2020. "Unbundling Returns to Degrees and Skills: Evidence from Postsecondary Education in Colombia," IDB Publications (Working Papers) 10069, Inter-American Development Bank.
  • Handle: RePEc:idb:brikps:10069

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    Cited by:

    1. Hemelt, Steven W. & Hershbein, Brad & Martin, Shawn & Stange, Kevin M., 2023. "College majors and skills: Evidence from the universe of online job ads," Labour Economics, Elsevier, vol. 85(C).
    2. Andrés Álvarez & Juan Camilo Chaparro & Carolina González & Santiago Levy & Darío Maldonado & Marcela Meléndez & Natalia Ramírez & Marta Juanita Villaveces, 2022. "Reporte ejecutivo de la Misión de Empleo de Colombia," Documentos de trabajo 20156, Escuela de Gobierno - Universidad de los Andes.

    More about this item


    Returns to skills; Returns to education; Numeracy; Literacy; Foreign language; Specific skills; Non-cognitive; Colombia;
    All these keywords.

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials


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