The effect of household characteristics on economic returns to schooling: evidence from the Palestinian territories

Ted Aranki

International Journal of Education Economics and Development, 2013, vol. 4, issue 1, 36-56

Abstract: This paper estimates the economic returns to schooling in the Palestinian territories, and examines the relationship between household characteristics and the returns received by male household members in the labour market. The basic findings are that the economic returns to schooling are very low, and the inclusion of household characteristics in the wage equation does not significantly lower the estimated returns to schooling. Yet, the least-square estimate of the economic returns to schooling in Palestine is overestimated because of omitted unobservable household characteristics from the wage-schooling relationship. This is true even after correcting for measurement error in the schooling variable. The measurement error-corrected least square estimator of the returns to schooling is overestimated by 32%. Nevertheless, the omitted variable bias is of different magnitude in the West Bank and the Gaza Strip. In fact, the results indicate that such a bias exists in the West Bank whereas the results for the Gaza Strip indicate no such bias. Thus, household background is likely to be a less important determinant of both education and earnings in the Gaza Strip.

Keywords: economic returns to schooling; wages; household characteristics; family background; omitted variable bias; measurement error; Palestine; male household members; men; labour market; West Bank; Gaza Strip; education; earnings. (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=54107 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijeded:v:4:y:2013:i:1:p:36-56

Access Statistics for this article

More articles in International Journal of Education Economics and Development from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().