MINCER RATES OF RETURN TO EDUCATION IN THE EMERGING ECONOMY OF ALBANIA

Gjipali Arsena and Kristo Suela
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Gjipali Arsena: Faculty of Business and Economics, Tirana University, Albania
Kristo Suela: Faculty of Business and Economics, Tirana University, Albania

Studies in Business and Economics, 2011, vol. 6, issue 2, 27-36

Abstract: In this paper we study the relationship between earnings and education measured in schooling levels. The main hypothesis to be tested is whether higher education levels reward with higher earnings the working labour force in Albania. We use cross section data from the Living Standards Measurement Survey (LSMS) of 2002 and develop a comprehensive framework for our quantitative analysis of the private returns to schooling and private incentives to invest in education. We construct estimates of the private return to each post-compulsory schooling level, taking into account the effects of education on wages. We find that only tertiary education provides significant positive returns with the upper secondary school being less rewarded. This finding might explain the reduced incentives to invest in additional post-compulsory schooling if this would not lead to tertiary.

Keywords: schooling; Mincer equation; returns to education (search for similar items in EconPapers)
Date: 2011
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