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Heterogeneous returns to education in the labor market

Author

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  • Fasih, Tazeen
  • Kingdon, Geeta
  • Patrinos, Harry Anthony
  • Sakellariou, Chris
  • Soderbom, Mans

Abstract

Since the development of human capital theory, countless estimates of the economic benefits of investing in education for the individual have been published. While it is a universal fact that in all countries of the world the more education one has the higher his or her earnings, it is nevertheless important to know the empirical returns to schooling. However, simply knowing average returns is not useful in a world of heterogeneity. This paper finds increasing returns going from the lower to the higher end of the earnings distribution, but with some important differences across regions. The returns increase by quantile for Latin America. The returns decrease by quantile for most East Asian countries, producing an overall equalizing effect. India and Pakistan demonstrate opposite results. In Ghana, the returns across the distribution are flat, while for Kenya and Tanzania education is dis-equalizing.

Suggested Citation

  • Fasih, Tazeen & Kingdon, Geeta & Patrinos, Harry Anthony & Sakellariou, Chris & Soderbom, Mans, 2012. "Heterogeneous returns to education in the labor market," Policy Research Working Paper Series 6170, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6170
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    References listed on IDEAS

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    Cited by:

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    2. Tran, Tuyen Quang & Hung Pham, Hiep & Thi Vo, Hoa & Thuy Luu, Hong & Mai Nguyen, Huong, 2019. "Local governance, education and occupation-education mismatch: Heterogeneous effects on wages in a lower middle income economy," International Journal of Educational Development, Elsevier, vol. 71(C).
    3. Andrea Atencio & Darwin Cortés & Juan Gallego, 2015. "Gender differences on sexual behavior and school inputs: evidence from Bogota," Documentos de Trabajo 12437, Universidad del Rosario.
    4. Balestra, Simone & Backes-Gellner, Uschi, 2017. "Heterogeneous returns to education over the wage distribution: Who profits the most?," Labour Economics, Elsevier, vol. 44(C), pages 89-105.
    5. Falco, Paolo & Haywood, Luke, 2016. "Entrepreneurship versus joblessness: Explaining the rise in self-employment," Journal of Development Economics, Elsevier, vol. 118(C), pages 245-265.
    6. Chen, Jie & Kanjilal-Bhaduri, Sanghamitra & Pastore, Francesco, 2022. "Updates on Returns to Education in India: Analysis Using PLFS 2018-19 Data," IZA Discussion Papers 15002, Institute of Labor Economics (IZA).

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    Keywords

    Education For All; Access&Equity in Basic Education; Primary Education; Teaching and Learning; Debt Markets;
    All these keywords.

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