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Schooling and labor market impacts of a natural policy experiment

Author

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  • Patrinos, Harry Anthony
  • Sakellariou, Chris

Abstract

The authors use a nationally representative household survey to estimate returns to schooling in Venezuela from instrumental variables based on a supply-side intervention in the education market. These estimates apply to a subgroup of liquidity-constrained individuals, in the spirit of the Local Average Treatment Effect (LATE) literature. Returns to schooling estimates which apply to a subgroup of individuals affected by the policy intervention may be more interesting from a policy perspective than the return to the"average"individual. The authors use an instrument based on the 1980 education reform (the Organic Law of Education) which provided for nine years of compulsory basic education. They also obtain alternative estimates using father's education as an instrument, in an attempt to derive high and low estimates of returns to schooling in Venezuela. The estimates are consistent with recent findings suggesting that the effect of education, at least for certain subgroups affected by a policy intervention, is as large, or larger than what is suggested by OLS estimates.

Suggested Citation

  • Patrinos, Harry Anthony & Sakellariou, Chris, 2004. "Schooling and labor market impacts of a natural policy experiment," Policy Research Working Paper Series 3460, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3460
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Mayer-Foulkes, David, 2008. "The Human Development Trap in Mexico," World Development, Elsevier, vol. 36(5), pages 775-796, May.
    2. Emanuela di Gropello, 2006. "Meeting the Challenges of Secondary Education in Latin America and East Asia : Improving Efficiency and Resource Mobilization," World Bank Publications, The World Bank, number 7173, April.
    3. Orazem, Peter & Glewwe, Paul & Patrinos, Harry, 2007. "The Benefits and Costs of Alternative Strategies to Improve Educational Outcomes," Staff General Research Papers Archive 12853, Iowa State University, Department of Economics.
    4. World Bank, 2005. "Mexico : Determinants of Learning Policy Note," World Bank Other Operational Studies 8284, The World Bank.
    5. Ismail, Ramlee, 2007. "The Impact of Schooling Reform on Returns to Education in Malaysia," MPRA Paper 15021, University Library of Munich, Germany, revised 29 Jan 2008.
    6. Patrinos, Harry A. & Sakellariou, Chris, 2011. "Quality of Schooling, Returns to Schooling and the 1981 Vouchers Reform in Chile," World Development, Elsevier, vol. 39(12), pages 2245-2256.
    7. Marito Garcia & Jean Fares, 2008. "Youth in Africa's Labor Market," World Bank Publications, The World Bank, number 6578, April.
    8. World Bank, 2004. "Sri Lanka - Reshaping Economic Geography : Connecting People to Prosperity," World Bank Publications, The World Bank, number 21549, April.
    9. Chuang, Yih-chyi & Lai, Wei-wen, 2010. "Heterogeneity, comparative advantage, and return to education: The case of Taiwan," Economics of Education Review, Elsevier, vol. 29(5), pages 804-812, October.

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