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Heterogeneity in the Returns to Tertiary Education for the Disadvantage Youth: Quality vs. Quantity Analysis

Leonardo Morales (), Christian Posso () and Luz Florez ()

Borradores de Economia from Banco de la Republica de Colombia

Abstract: This paper usesadministrative records from different sources to construct a unique data set of low-income students in Colombia born from 1980 to 1990. This data includes cognitive test results, socio-economic information at their high school final year, and information on their labor market results, many years after high school graduation. We evaluate the returns by estimating the Marginal Treatment Effect (MTE) of the tertiary investment decision. The MTE allows estimating a random parameter for tertiary education return, which varies with unobserved heterogeneity across workers. We find sizeable heterogeneity in returns, as recent literature has also identified, to the extent that for a considerable mass of the population,the return is negligible. Using the estimated models, we simulate two types of policies: one that increases the supply of tertiary education and another that enhances secondary education quality. We find thata less costly policy that improvessecondary education qualitygives similar returns than a more ambitious policy that increases tertiary education supply. **** RESUMEN: Este artículo utiliza registros administrativos de diferentes fuentes para construir un base datos de estudiantes de bajos ingresos en Colombia nacidos entre 1980 y 1990. Estos datos incluyen resultados de pruebas cognitivas, información socioeconómica en su último año de secundaria, e información sobre su trabajo, años después de la graduación de la secundaria. Evaluamos los rendimientos de la educación terciaria estimando el “efecto marginal de tratamiento”(MTE) de la inversión en educación terciaria. ElMTE permite estimar un parámetro aleatorio para el rendimiento de la educación, que varía con la heterogeneidad no observada de los trabajadores. Encontramos una heterogeneidad considerable en los retornos, al punto de que, para una masa de la población, el retorno es cercano a cero. Utilizando los modelos estimados, simulamos dos tipos de políticas: una que aumenta la oferta de educación terciaria y otra que mejora la calidad de la educación secundaria. Se encuentra que una política que mejora la calidad de la educación secundaria da rendimientos similares a una política ambiciosa de incrementos en la oferta de educación terciaria.

Keywords: Returns to tertiary education; marginal treatment effect; university expansion; quality of education; education; wages; Retornos a la educación; MTE; expansión universitaria; Calidad de la educación; Salarios. (search for similar items in EconPapers)
JEL-codes: I21 I26 I28 J31 (search for similar items in EconPapers)
Pages: 36
Date: 2021-01
New Economics Papers: this item is included in nep-edu and nep-lma
References: View references in EconPapers View complete reference list from CitEc
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Persistent link: https://EconPapers.repec.org/RePEc:bdr:borrec:1150

DOI: 10.32468/be.1150

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