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Disaggregating rates of return to education

Author

Listed:
  • Khan, Shahrukh R.
  • Mohammad, Irfan

Abstract

Education is effectively used as a discontinuous variable in studies estimating the rates of return by level of education. We find that the normal procedure used for estimating the rate of return to broad aggregates such as secondary and high understates the returns to these levels and subsequently suggest a procedure for rectifying this bias. We also find, as expected, that broad aggregations that ignore sub-levels of education result in a loss of important insights about the interaction of education and the labor market.

Suggested Citation

  • Khan, Shahrukh R. & Mohammad, Irfan, 1990. "Disaggregating rates of return to education," MPRA Paper 39208, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:39208
    as

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    File URL: https://mpra.ub.uni-muenchen.de/39208/1/MPRA_paper_39208.pdf
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    References listed on IDEAS

    as
    1. George Psacharopoulos, 1985. "Returns to Education: A Further International Update and Implications," Journal of Human Resources, University of Wisconsin Press, vol. 20(4), pages 583-604.
    2. Hungerford, Thomas & Solon, Gary, 1987. "Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 175-177, February.
    3. Boissiere, M & Knight, J B & Sabot, R H, 1985. "Earnings, Schooling, Ability, and Cognitive Skills," American Economic Review, American Economic Association, vol. 75(5), pages 1016-1030, December.
    4. Shahnaz Kazi & Zeba A. Sathar, 1985. "Differences in Household Characteristics by Income Distribution in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 24(3-4), pages 657-669.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Estimating the rates of return; Education; Labor Market;

    JEL classification:

    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • I2 - Health, Education, and Welfare - - Education
    • P3 - Economic Systems - - Socialist Institutions and Their Transitions
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy

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