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Heterogeneous returns to education in the labor market


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


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:

    1. 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.
    2. Andrea Atencio & Darwin Cortés & Juan Gallego, 2015. "Gender differences on sexual behavior and school inputs: evidence from Bogota," DOCUMENTOS DE TRABAJO 012437, UNIVERSIDAD DEL ROSARIO.
    3. Simone Balestra & Uschi Backes-Gellner, 2013. "Heterogeneous Returns to Education Over Wage Distribution: Who Profits the Most?," Economics of Education Working Paper Series 0091, University of Zurich, Department of Business Administration (IBW), revised Dec 2013.

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

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