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Low Wage Returns to Schooling in a Developing Country: Evidence from a Major Policy Reform in Turkey

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  • Aydemir, Abdurrahman

    (Sabanci University)

  • Kirdar, Murat G.

    (Bogazici University)

Abstract

In this paper, we estimate the returns on schooling for young men and women in Turkey using the exogenous and substantial variation in schooling across birth-cohorts brought about by the 1997 reform of compulsory schooling. We estimate that among 18- to 26-year-olds, the return from an extra year of schooling is almost zero for men and 3.8 percent for women. The low level of these estimates contrasts starkly with those estimated for other developing countries. We identify several reasons why the returns on schooling are low and why they are higher for women in our context. In particular, the policy alters the schooling distributions of men and women differently, thus the average causal effect we estimate puts a higher weight on the causal effect of schooling at higher grade levels for women than for men.

Suggested Citation

  • Aydemir, Abdurrahman & Kirdar, Murat G., 2015. "Low Wage Returns to Schooling in a Developing Country: Evidence from a Major Policy Reform in Turkey," IZA Discussion Papers 9274, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp9274
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    Cited by:

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    2. Caner, Asena & Demirel, Merve & Okten, Cagla, 2019. "Attainment and Gender Equality in Higher Education: Evidence from a Large Scale Expansion," IZA Discussion Papers 12711, Institute of Labor Economics (IZA).
    3. Abdurrahman B. Aydemir & Murat Güray Kırdar & Huzeyfe Torun, 2019. "The Effect of Education on Geographic Mobility: Incidence, Timing, and Type of Migration," CReAM Discussion Paper Series 1914, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    4. Dayioglu-Tayfur, Meltem & Kirdar, Murat G., 2020. "Keeping Kids in School and Out of Work: Compulsory Schooling and Child Labor in Turkey," IZA Discussion Papers 13276, Institute of Labor Economics (IZA).
    5. Harry Anthony Patrinos & George Psacharopoulos & Aysit Tansel, 2019. "Returns to Investment in Education: The Case of Turkey," Koç University-TUSIAD Economic Research Forum Working Papers 1906, Koc University-TUSIAD Economic Research Forum.
    6. Huzeyfe Torun & Semih Tumen, 2017. "The empirical content of season-of-birth effects: An investigation with Turkish data," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 37(57), pages 1825-1860.
    7. Mustafa Özer & Jan Fidrmuc, 2017. "Male Education and Domestic Violence in Turkey: Evidence from a Natural Experiment," CESifo Working Paper Series 6526, CESifo.
    8. Pellicer, Miquel, 2018. "The evolution of returns to education in the Middle East and North Africa: Evidence from comparable education policy changes in Tunisia," Economics of Education Review, Elsevier, vol. 62(C), pages 183-191.
    9. Harry Anthony Patrinos & George Psacharopoulos & Aysit Tansel, 2019. "GLOBALISATION AND GOVERNANCE: Returns to Investment in Education: The Case of Turkey," ERC Working Papers 1903, ERC - Economic Research Center, Middle East Technical University, revised Mar 2019.
    10. Özer, Mustafa & Fidrmuc, Jan, 2017. "Male Education and Domestic Violence in Turkey: Evidence from a Natural Experiment," GLO Discussion Paper Series 109, Global Labor Organization (GLO).
    11. Ragui Assaad & Abdurrahman Aydemir & Meltem Dayioglu & Guray Kirdar, 2016. "Returns to Schooling in Egypt," Working Papers 1000, Economic Research Forum, revised May 2016.
    12. Harry Anthony Patrinos & George Psacharopoulos & Aysit Tansel, 2019. "Returns to Investment in Education: The Case of Turkey," Koç University-TUSIAD Economic Research Forum Working Papers 1906, Koc University-TUSIAD Economic Research Forum.
    13. Akyol, Pelin & Kirdar, Murat G., 2020. "Does Education Really Cause Domestic Violence? Replication and Reappraisal of "For Better or For Worse? Education and the Prevalence of Domestic Violence in Turkey"," IZA Discussion Papers 14001, Institute of Labor Economics (IZA).
    14. Ozturk, Ahmet & Tumen, Semih, 2018. "Education and Labor Market Consequences of Student Protests in Late 1970s and the Subsequent Military Coup in Turkey," IZA Discussion Papers 11733, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    compulsory schooling laws; returns to education; wages; gender;
    All these keywords.

    JEL classification:

    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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