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Average and marginal returns to upper secondary schooling in Indonesia

Author Info

Listed author(s):
  • Pedro Carneiro

    ()

    (Institute for Fiscal Studies and University College London)

  • Michael Lokshin

    (Institute for Fiscal Studies)

  • Cristobal Ridao-Cano

    (Institute for Fiscal Studies)

  • Nithin Umapathi

    (Institute for Fiscal Studies and World Bank)

Abstract

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.

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File URL: http://cemmap.ifs.org.uk/wps/cwp3611.pdf
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Paper provided by Centre for Microdata Methods and Practice, Institute for Fiscal Studies in its series CeMMAP working papers with number CWP36/11.

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Date of creation: 20 Nov 2011
Handle: RePEc:ifs:cemmap:36/11
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Find related papers by 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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  1. Pedro Carneiro & James J. Heckman & Edward Vytlacil, 2010. "Evaluating Marginal Policy Changes and the Average Effect of Treatment for Individuals at the Margin," Econometrica, Econometric Society, vol. 78(1), pages 377-394, 01.
  2. Pedro Carneiro & James J. Heckman, 2002. "The Evidence on Credit Constraints in Post--secondary Schooling," Economic Journal, Royal Economic Society, vol. 112(482), pages 705-734, October.
  3. James J. Heckman & Edward Vytlacil, 2005. "Structural Equations, Treatment Effects, and Econometric Policy Evaluation," Econometrica, Econometric Society, vol. 73(3), pages 669-738, 05.
  4. Pedro Carneiro & James J. Heckman & Edward J. Vytlacil, 2011. "Estimating Marginal Returns to Education," American Economic Review, American Economic Association, vol. 101(6), pages 2754-2781, October.
  5. Lorraine Dearden & Leslie McGranahan & Leslie McGranahan & Barbara Sianesi, 2004. "Returns to Education for the Marginal Learner: Evidence from the BCS70," CEE Discussion Papers 0045, Centre for the Economics of Education, LSE.
  6. Duflo, Esther, 2004. "The medium run effects of educational expansion: evidence from a large school construction program in Indonesia," Journal of Development Economics, Elsevier, vol. 74(1), pages 163-197, June.
  7. Carneiro, Pedro & Lee, Sokbae, 2010. "Trends in Quality Adjusted Skill Premia in the US, 1960-2000," CEPR Discussion Papers 8108, C.E.P.R. Discussion Papers.
  8. Carneiro, Pedro & Lee, Sokbae, 2009. "Estimating distributions of potential outcomes using local instrumental variables with an application to changes in college enrollment and wage inequality," Journal of Econometrics, Elsevier, vol. 149(2), pages 191-208, April.
  9. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA).
  10. Wang, Xiaojun & Fleisher, Belton M. & Li, Haizheng & Li, Shi, 2007. "Access to Higher Education and Inequality: The Chinese Experiment," IZA Discussion Papers 2823, Institute for the Study of Labor (IZA).
  11. Bjorklund, Anders & Moffitt, Robert, 1987. "The Estimation of Wage Gains and Welfare Gains in Self-selection," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 42-49, February.
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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.

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