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Earnings and education in Latin America : assessing priorities for schooling investments

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  • Psacharopoulos, George
  • Ying Chu Ng

Abstract

The authors use household survey data for 18 Latin American countries to assess earnings differentials by level of education, and to assess how these differentials changed in the 1980s. Introducing the cost of education allows them to estimate private and social rates of return on investments on education across several dimensions: by gender, by level of education, by sector of employment, by nature of the secondary school curriculum, and over time. The results show that, in most countries, the earnings premium received by graduates of higher education decreased in the 1980s. Investment in primary education shows the highest rate of return among all levels considered - and is still the number one investment priority in most countries.

Suggested Citation

  • Psacharopoulos, George & Ying Chu Ng, 1992. "Earnings and education in Latin America : assessing priorities for schooling investments," Policy Research Working Paper Series 1056, The World Bank.
    • Handle: RePEc:wbk:wbrwps:1056
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    References listed on IDEAS

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    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. Psacharopoulos, George & Steier, Francis, 1988. "Education and the labor market in Venezuela, 1975-1984," Economics of Education Review, Elsevier, vol. 7(3), pages 321-332, June.
    3. Kugler, Bernardo & Psacharopoulos, George, 1989. "Earnings and education in Argentina: an analysis of the 1985 Buenos Aires Household Survey," Economics of Education Review, Elsevier, vol. 8(4), pages 353-365, August.
    4. George Psacharopoulos & Richard Layard, 1979. "Human Capital and Earnings: British Evidence and a Critique," Review of Economic Studies, Oxford University Press, vol. 46(3), pages 485-503.
    5. Psacharopoulos, George, 1989. "Time trends of the returns to education: Cross-national evidence," Economics of Education Review, Elsevier, vol. 8(3), pages 225-231, June.
    6. Velez, Eduardo & Psacharopoulos, George, 1987. "The external efficiency of diversified secondary schools in Colombia," Economics of Education Review, Elsevier, vol. 6(2), pages 99-110, April.
    7. Gomez-Castellanos, Luisa & Psacharopoulos, George, 1990. "Earnings and education in Ecuador: Evidence from the 1987 household survey," Economics of Education Review, Elsevier, vol. 9(3), pages 219-227, September.
    8. Riveros, Luis A., 1990. "The economic return to schooling in Chile. An analysis of its long-term fluctuations," Economics of Education Review, Elsevier, vol. 9(2), pages 111-121, June.
    9. Fiszbein, Ariel & Psacharopoulos, George, 1993. "A cost-benefit analysis of educational investment in Venezuela: 1989 update," Economics of Education Review, Elsevier, vol. 12(4), pages 293-298, December.
    10. Psacharopoulos, George & Velez, Eduardo, 1994. "Education and the labor market in Uruguay," Economics of Education Review, Elsevier, vol. 13(1), pages 19-27, March.
    11. Psacharopoulos, George, 1988. "Education and Development: A Review," World Bank Research Observer, World Bank Group, vol. 3(1), pages 99-116, January.
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    Citations

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    Cited by:

    1. Crouch, Luis A., 1996. "Public education equity and efficiency in South Africa: Lessons for other countries," Economics of Education Review, Elsevier, vol. 15(2), pages 125-137, April.
    2. Bedi, Arjun S. & Gaston, Noel, 1999. "Using variation in schooling availability to estimate educational returns for Honduras," Economics of Education Review, Elsevier, vol. 18(1), pages 107-116, February.
    3. Montobbio, Fabio & Rampa, Francesco, 2005. "The impact of technology and structural change on export performance in nine developing countries," World Development, Elsevier, vol. 33(4), pages 527-547, April.
    4. Paul Bennell, 1996. "Privatization, choice and competition: The World Bank's reform agenda for vocational education and training in sub-Saharan Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(3), pages 467-487.
    5. Funkhouser, Edward, 1998. "Changes in the returns to education in Costa Rica," Journal of Development Economics, Elsevier, vol. 57(2), pages 289-317.
    6. Ruth Judson, 1996. "Do low human capital coefficients make sense? A puzzle and some answers," Finance and Economics Discussion Series 96-13, Board of Governors of the Federal Reserve System (U.S.).
    7. Paul Bennell, 1996. "General versus vocational secondary education in developing countries: A review of the rates of return evidence," Journal of Development Studies, Taylor & Francis Journals, vol. 33(2), pages 230-247.
    8. Lachler, Ulrich, 1998. "Education and earnings inequality in Mexico," Policy Research Working Paper Series 1949, The World Bank.
    9. D. Lederman & W.F. Maloney & J. Messina, 2011. "The Fall of Wage Flexibility," World Bank Other Operational Studies 23575, The World Bank.
    10. -, 2002. "Social Panorama of Latin America 2001-2002," Panorama Social de América Latina, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1214 edited by Eclac, December.
    11. Arjun Bedi & Noel Gaston, 1997. "Returns to endogenous education: the case of Honduras," Applied Economics, Taylor & Francis Journals, vol. 29(4), pages 519-528.
    12. -, 2011. "Social Panorama of Latin America 2010," Panorama Social de América Latina, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1237 edited by Eclac, December.
    13. World Bank, 2004. "Poverty in Guatemala," World Bank Publications, The World Bank, number 15066, April.
    14. Funkhouser, Edward, 1998. "The importance of firm wage differentials in explaining hourly earnings variation in the large-scale sector of Guatemala," Journal of Development Economics, Elsevier, vol. 55(1), pages 115-131, February.

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