Endogeneity, computers, language skills and wages among university graduates in Vietnam

Christos Sakellariou ()

Applied Economics, 2009, vol. 41, issue 5, pages 653-663

Abstract: One would expect that returns to supplementary skills in developing countries are considerably higher, compared to those documented for developed countries (as is the case with returns to schooling). I derive estimates of returns to the use of computer and foreign language skills in Vietnam after controlling for endogeneity, using a binary instrument hypothesized to reflect reconstruction (Doi Moi) policies in Vietnam. I find that (a) the use of both computers and language skills is associated with very large earnings premiums (b) IV return estimates are as high as and sometimes higher than OLS estimates, however, they should be interpreted in relation to the instrument used.

Date: 2009

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