Estimating the returns to education: accounting for heterogeneity in ability

Harry Patrinos, Cris Ridao-Cano and Christos Sakellariou

No 4040, Policy Research Working Paper Series from The World Bank

Abstract: Typically estimates of the benefits of education investments show average private rates of return for the average individual. The average may not be useful for policy. An examination of the distribution of the returns across individuals is needed. The few studies that have examined these patterns focus on high-income countries, showing investments to be more profitable at the top of the income distribution. The implication is that investments may increase inequality. Extending the analysis to 16 East Asian and Latin American countries the authors observe mixed evidence in middle-income countries and decreasing returns in low-income countries. Such differences between countries could be due to more job mobility in industrial countries, scarcity of skills, or differential exposure to market forces.

Keywords: Access&Equity in Basic Education; Education For All; Teaching and Learning; Primary Education; Education and Society; Economics of Education (search for similar items in EconPapers)
Date: 2006-10-01
New Economics Papers: this item is included in nep-dev, nep-edu, nep-hrm, nep-lab and nep-sea
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Citations: View citations in EconPapers (26)

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