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Low Wage Returns to Schooling in a Developing Country: Evidence from a Major Policy Reform in Turkey

Abdurrahman Aydemir () and Murat Kırdar ()

No 9274, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper, we estimate the returns on schooling for young men and women in Turkey using the exogenous and substantial variation in schooling across birth-cohorts brought about by the 1997 reform of compulsory schooling. We estimate that among 18- to 26-year-olds, the return from an extra year of schooling is almost zero for men and 3.8 percent for women. The low level of these estimates contrasts starkly with those estimated for other developing countries. We identify several reasons why the returns on schooling are low and why they are higher for women in our context. In particular, the policy alters the schooling distributions of men and women differently, thus the average causal effect we estimate puts a higher weight on the causal effect of schooling at higher grade levels for women than for men.

Keywords: compulsory schooling laws; returns to education; wages; gender (search for similar items in EconPapers)
JEL-codes: J18 J31 I21 I28 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2015-08
New Economics Papers: this item is included in nep-ara, nep-cwa, nep-edu and nep-lab
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Citations: View citations in EconPapers (4) Track citations by RSS feed

Published in: Oxford Bulletin of Economics and Statistics, 2017, 79 (6), 1046-1086.

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