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A comparative study of returns to education of urban men in Egypt, Iran, and Turkey

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  • Djavad Salehi-Isfahani
  • Insan Tunali
  • Ragui Assaad

Abstract

This paper presents a comparative study of private returns to schooling of urban men in Egypt, Iran, and Turkey using similar survey data and a uniform methodology. We employ three surveys for each country that span nearly two decades, from the 1980s to 2006, and, to increase the comparability of the estimates across surveys, we focus on urban men 20-54 years old and in full time wage and salary employment. Our aim is to learn how the monetary signals of rewards that guide individual decisions to invest in education are shaped by the institutions of education and labor markets in these countries. Our estimates generally support the stylized facts of the institutions of education and labor markets in Middle Eastern countries. Their labor markets have been described as dominated by the public sector and therefore relatively inflexible, and their education systems as more focused on secondary and tertiary degrees than teaching practical and productive skills. Returns in all countries are increasing in years of schooling, which is contrary to the Mincer assumption of linear returns but consistent with overemphasis on secondary and tertiary degrees. Low returns to vocational training relative to general upper secondary, which have been observed in many developing countries, are observed in Egypt and Iran, but not Turkey. This pattern of returns across countries seems to correspond to how students are selected into vocational and general upper secondary tracks, which is an important part of the education institutions of these countries, and the fact that Turkey’s economy is more open than the other two. Greater competitiveness in all three countries over time seems to have increased returns to university education and in few cases to vocational education, but not to general high school.

Suggested Citation

  • Djavad Salehi-Isfahani & Insan Tunali & Ragui Assaad, 2009. "A comparative study of returns to education of urban men in Egypt, Iran, and Turkey," Working Papers e07-17, Virginia Polytechnic Institute and State University, Department of Economics.
  • Handle: RePEc:vpi:wpaper:e07-17
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    Cited by:

    1. Aysit Tansel & Yousef Daoud, 2011. "Comparative Essays on Returns to Education in Palestine and Turkey," ERC Working Papers 1102, ERC - Economic Research Center, Middle East Technical University, revised May 2011.
    2. Assaad, Ragui & Krafft, Caroline, 2015. "Is free basic education in Egypt a reality or a myth?," International Journal of Educational Development, Elsevier, vol. 45(C), pages 16-30.
    3. Amirah El-Haddad, 2016. "Government Intervention with No Structural Transformation: The Challenges of Egyptian Industrial Policy in Comparative Perspective (ARABIC)," Working Papers 1038, Economic Research Forum, revised Aug 2016.
    4. McAdam, Peter & Christopoulos, Dimitris, 2015. "Efficiency, Inefficiency and the MENA Frontier," Working Paper Series 1757, European Central Bank.
    5. Binzel, Christine, 2011. "Decline in Social Mobility: Unfulfilled Aspirations among Egypt's Educated Youth," IZA Discussion Papers 6139, Institute for the Study of Labor (IZA).
    6. Tuomas Pekkarinen & Miquel Pellicer, 2013. "Education and allocation of skills in Tunisia: evidence from an education reform," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-21, December.
    7. Djavad Salehi-Isfahani & Nadia Hassine & Ragui Assaad, 2014. "Equality of opportunity in educational achievement in the Middle East and North Africa," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(4), pages 489-515, December.
    8. Djavad Salehi-Isfahani, 2010. "Human Development in the Middle East and North Africa," Human Development Research Papers (2009 to present) HDRP-2010-26, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    9. Rihab Bellakhal & Mohamed-Badrane Mahjoub, 2015. "Estimating the effect of vocational training programs on employment and wage: The case of Tunisia," Economics Bulletin, AccessEcon, vol. 35(3), pages 1820-1833.
    10. Djavad Salehi-Isfahani & Sara Taghvatalab, 2017. "Education and the Allocation of Time of Married Women in Iran," Working Papers 1114, Economic Research Forum, revised 06 2003.
    11. Karshenas, Massoud & Moghadam, Valentine M. & Alami, Randa, 2014. "Social Policy after the Arab Spring: States and Social Rights in the MENA Region," World Development, Elsevier, vol. 64(C), pages 726-739.
    12. Ragui Assaad & Miquel Pellicer & Caroline Krafft & Colette Salemi, 2002. "Grievances or Skills? The Effect of Education on Youth Attitudes and Political Participation in Egypt and Tunisia," Working Papers 1103, Economic Research Forum, revised 01 Jun 2002.
    13. Asmaa Elbadawy, 2014. "Education in Egypt: Improvements in Attainment, Problems with Quality and Inequality," Working Papers 854, Economic Research Forum, revised Nov 2014.
    14. Polat, Sezgin, 2016. "Some Economic Consequences of Higher Education Expansion in Turkey," MPRA Paper 72602, University Library of Munich, Germany.
    15. Assaad, Ragui & Krafft, Caroline, 2017. "Excluded Generation: The Growing Challenges of Labor Market Insertion for Egyptian Youth," IZA Discussion Papers 10970, Institute for the Study of Labor (IZA).
    16. Zafiris Tzannatos & Ishac Diwan & Joanna Abdel Ahad, 2016. "Rates of Return to Education in Twenty Two Arab Countries: an Update and Comparison Between MENA and the Rest of the World," Working Papers 1007, Economic Research Forum, revised May 2016.

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    Keywords

    Egypt; Iran; Turkey; returns to education; Mincer equation; labor market institutions; education institutions; labor market flexibility;

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