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Returns to investment in education : a decennial review of the global literature


  • Psacharopoulos,George
  • Patrinos,Harry Anthony


Returns to investment in education based on human capital theory have been estimated systematically since the 1950s. In the 60-plus year history of such estimates, there have been several compilations in the literature. This paper reviews and highlights the latest trends and patterns based on a database of 1,120 estimates in 139 countries. The review shows that the private average global rate of return to one extra year of schooling is about 9 percent a year and very stable over decades. Private returns to higher education have increased over time, raising issues of financing and equity. Social returns to schooling remain high, above 10 percent at the secondary and higher education levels. Women continue to experience higher average rates of return to schooling, showing that girls'education remains a priority. Returns are higher in low-income countries. Those employed in the private sector of the economy enjoy higher returns than those in the public sector, lending support to the productive value of education.

Suggested Citation

  • Psacharopoulos,George & Patrinos,Harry Anthony, 2018. "Returns to investment in education : a decennial review of the global literature," Policy Research Working Paper Series 8402, The World Bank.
  • Handle: RePEc:wbk:wbrwps:8402

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    Cited by:

    1. Tillmann Heidelk, 2019. "The Returns to Education in the Context of a Natural Disaster: Evidence from the 2010 Earthquake in Haiti," Working Papers ECARES 2019-17, ULB -- Universite Libre de Bruxelles.
    2. repec:hig:fsight:v:13:y:2019:i:2:p:19-41 is not listed on IDEAS
    3. repec:zag:zirebs:v:22:y:2019:i:1:p:1-12 is not listed on IDEAS
    4. Jones Sam & Trifkovi? Neda & Sohnesen Thomas, 2018. "The evolution of private returns to education during post-conflict transformation: Evidence from Mozambique," WIDER Working Paper Series 143, World Institute for Development Economic Research (UNU-WIDER).
    5. repec:eee:injoed:v:66:y:2019:i:c:p:214-222 is not listed on IDEAS
    6. World Bank Group, 2018. "AFCW3 Economic Update, Fall 2018," World Bank Other Operational Studies 30868, The World Bank.
    7. World Bank Group, 2019. "Tanzania Economic Update, January 2019," World Bank Other Operational Studies 31242, The World Bank.
    8. Oreopoulos, Philip & Petronijevic, Uros, 2019. "The Remarkable Unresponsiveness of College Students to Nudging and What We Can Learn from It," IZA Discussion Papers 12460, Institute of Labor Economics (IZA).
    9. Bloom, David E. & Canning, David & Kotschy, Rainer & Prettner, Klaus & Schünemann, Johannes, 2018. "Health and Economic Growth: Reconciling the Micro and Macro Evidence," IZA Discussion Papers 11940, Institute of Labor Economics (IZA).
    10. repec:eee:telpol:v:43:y:2019:i:4:p:353-360 is not listed on IDEAS
    11. Teresa Molina & Ivan Rivadeneyra, 2019. "The Labor Market Effects of Eliminating University Tuition in Ecuador," Working Papers 201901, University of Hawaii at Manoa, Department of Economics.
    12. Domenico Rossignoli & Sara Balestri & Simona Beretta & Mario A. Maggioni, 2019. "International Child Sponsorship and School Performance: Evidence from Goma (DRC)," DISEIS - Quaderni del Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo dis1905, Università Cattolica del Sacro Cuore, Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo (DISEIS).


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