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Heterogeneity in the Returns to Education and Experience: Evidence from a High and a Low Income S.E. Asian Country

  • Chris Sakellariou

    (Division of Economics,School of Humanities and Social Sciences, Nanyang Technological University, Singapore)

This study investigates the pattern of returns across the earnings distribution by first, contributing new evidence on the pattern of returns to education and experience for one developed and one developing S.E. Asian country (Singapore and the Philippines, respectively); subsequently the existence of a relationship between a country’s development stage and the pattern of returns to education along the earnings distribution is investigated, by putting together the existing international evidence. It was found that quantile returns to an additional year of schooling in the Philippines decrease monotonically, while the opposite is the case for Singapore. This pattern is maintained for both men and women. Looking at the quality rather than quantity of education, we find that in the Philippines the pattern of quantile returns for those with tertiary qualifications are sharply decreasing with quantiles, while it exhibits a more moderate decrease for those with primary and secondary qualifications. In the case of Singapore the pattern of returns for those with primary and tertiary qualifications is increasing with quantiles, while it is relatively flat for those with secondary qualifications. A compilation of the available evidence from 27 case studies suggests that a pattern is emerging, with high income countries associated with increasing returns by quantile and low income countries associated with a decreasing pattern of returns.

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File URL: http://www.ntu.edu.sg/hss2/egc/wp/2005/2005-01.pdf
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Paper provided by Nanyang Technological University, School of Humanities and Social Sciences, Economic Growth Centre in its series Economic Growth Centre Working Paper Series with number 0501.

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Length: 28 pages
Date of creation: Jan 2005
Date of revision:
Handle: RePEc:nan:wpaper:0501
Contact details of provider: Postal: Nanyang Drive, Singapore 637332
Fax: 6795 5797
Web page: http://egc.hss.ntu.edu.sg/

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  1. Schultz, T.P. & Mwabu, G., 1995. "Education Returns Across Quantiles of the Wage Function: Alternative Explanation for Returns to Education by Race in South Africa," Papers 744, Yale - Economic Growth Center.
  2. Martins, Pedro S. & Pereira, Pedro T., 2004. "Does education reduce wage inequality? Quantile regression evidence from 16 countries," Labour Economics, Elsevier, vol. 11(3), pages 355-371, June.
  3. Pereira, Pedro Telhado & Martins, Pedro Silva, 2000. "Does Education Reduce Wage Inequality? Quantile Regressions Evidence from Fifteen European Countries," FEUNL Working Paper Series wp379, Universidade Nova de Lisboa, Faculdade de Economia.
  4. Patrinos, Harry Anthony & Sakellariou, Chris, 2004. "Economic volatility and returns to education in Venezuela : 1992-2002," Policy Research Working Paper Series 3459, The World Bank.
  5. 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.
  6. Koenker, Roger & Bassett, Gilbert, Jr, 1982. "Robust Tests for Heteroscedasticity Based on Regression Quantiles," Econometrica, Econometric Society, vol. 50(1), pages 43-61, January.
  7. Sourafel Girma & Abbi Kedir, 2003. "Is Education More Benficial to the Less Able? Eocnometric Evidence from Ethiopia," Discussion Papers in Economics 03/1, Department of Economics, University of Leicester.
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