Alejos, Luis Alejandro (2006): La elección del sector laboral y los retornos a la educación en Guatemala. Published in: Revista Estudios Sociales , Vol. IV Epo, No. 75 : pp. 13-64.
Download (212Kb) | Preview
This paper estimates the returns to education in Guatemala, while attempting to account for self-employment and the presence of workers without monetary earnings in the economy, factors whose omission can potentially lead to sample selection bias. The analysis uses data from the Survey of Living Conditions (ENCOVI 2000) to obtain estimates of the rate of returns to different levels of schooling using a human capital earnings function. A multinomial logit model for sector choice is implemented to correct for selection bias as in Bourguignon, Fournier and Gurgand (2001). Non-linearities in the returns to education are strongly supported by the empirical results. It is found that OLS estimates which do not account for sector choice significantly overestimate the returns to primary and early secondary schooling, while underestimating the returns to late secondary education. The results also show lower rates of return in the self-employment sector and that workers who only complete primary or early secondary schooling have a higher probability of entering this sector.
|Item Type:||MPRA Paper|
|Original Title:||La elección del sector laboral y los retornos a la educación en Guatemala|
|English Title:||Labour Sector Choice and the Returns to Education in Guatemala|
|Keywords:||returns to education; self-employment; unpaid work|
|Subjects:||J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials
I - Health, Education, and Welfare > I2 - Education and Research Insititutions > I20 - General
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
|Depositing User:||Luis Alejos|
|Date Deposited:||21. Nov 2012 15:24|
|Last Modified:||22. Feb 2013 05:42|
Alejos, Luis A. (2004) “Participación de los Determinantes de la Desigualdad de Ingresos”. Revista Estudios Sociales, No. 70, pp. 1-48. Instituto de Investigaciones Económicas y Sociales (IDIES/URL), Universidad Rafael Landívar, Guatemala.
Anderson, Maria Elena (2001) “Guatemala: The Education Sector”. Guatemala Poverty Assessment Program, Technical Paper No. 2, World Bank. Angrist, J. and Alan Krueger (1991) “Does Compulsory School Attendance Affect Schooling and Earnings?” Quarterly Journal of Economics, Vol. 106, No. 4, pp. 979-1014.
Ashenfelter, O. and Alan Krueger (1994) “Estimates of the Economic Return to Schooling from a New Sample of Twins”. American Economic Review, Vol. 84, No. 5, pp. 1157-1173.
Becker, G. S. (1962) “Investment in Human Capital: A theoretical analysis”. Journal of Political Economy, Vol. 70, No. 5, Part 2: Investment in Human Beings, pp. 9-49.
Becker, G. S. and Barry R. Chiswick (1966) “Education and the Distribution of Earnings”. American Economic Review, Vol. 56, No. 1/2, pp. 358-369.
Bennell, P. (1996) “Rates of Return to Education: Does the Conventional Pattern Prevail in sub-Saharan Africa?”. World Development, Vol. 24, No. 1, pp. 183-199.
Blundell, R, Lorraine Dearden and Barbara Sianesi (2004) “Evaluating the Impact of Education on Earnings in the UK: Models, Methods and Results from the NCDS”. Institute for Fiscal Studies Working Paper No. 03/20.
Bonjour, D., Lyn Cherkas, Jonathan Haskel, Denise Hawkes and Tim Spector (2002) “Returns to Education: Evidence from UK Twins” Paper No. CEEDP0022, Centre for the Economics of Education.
Bourguignon, F. and Francisco Ferreira (2005) “Decomposing Changes in the Distribution of Households Incomes: Methodological Aspects”. Chapter 2 in F. Bourguignon, F. Ferreira and N. Lustig, The Microeconomics of Income Distribution Dynamics In East Asia and Latin America, World Bank / Oxford University Press.
Bourguignon, F., Martin Fournier and Marc Gurgand (2001) “Selection Bias Correction Based on the Multinomial Logit Model”. Working Paper No. 2002- 04, CREST/INSEE, Paris.
Bowman, M.J. (1966) “The Human Investment Revolution in Economic Thought”. Sociology of Education, Vol. 39, No. 2, pp. 111-137.
Card, D. (2000) “Estimating The Return to Schooling: Progress on some persistent econometric problems”. NBER Working Paper No. 7769.
Carneiro, P. and James J. Heckman (2003) “Human Capital Policy”. Chapter in J. Heckman, A. Krueger, Inequality in America: What Role for Human Capital Policies, MIT Press.
Carneiro, P., James J. Heckman and E. Vytlacil (2001) “Estimating the Returns to Education When It Varies Among Individuals”. Working Paper. May version.
Chiswick, Barry R. (1997) "Interpreting the Coefficient of Schooling in the Human Capital Earnings Function". World Bank Policy Research Working Paper No. 1790.
Chiswick, Barry R. (2003) “Jacob Mincer, Experience and the Distribution of Earnings”. IZA Discussion Paper No. 847.
Chung, Tsung-Ping (2000) “The Returns to Education and Training: Evidence from the Malaysian Family Life Surveys”. Discussion Paper No. 00/07, University of Kent.
Edwards, John (2002) “Education and Poverty in Guatemala” Guatemala Poverty Assessment Program, Technical Paper No. 3, World Bank.
Ferreira, F. and Phillippe G. Leite (2002) “Educational Expansion and Income Distribution: A Micro-Simulation for Ceará”. Departamento Economia PUCRIO, Texto para Discusão No. 456.
Gaston, Noel and Jaime Tenjo (1992). “Educational Attainment and Earnings Determination in Colombia”. Economic Development and Cultural Change, Vol. 41, No. 1, pp. 125-139.
Griliches, Zvi (1977) “Estimating the Returns to Schooling: Some Econometric Problems”. Econometrica, Vol. 45, No. 1, pp. 1-22.
Heckman, James J. (1979) “Sample Selection Bias as a Specification Error”. Econometrica, Vol. 47, No. 1, pp. 153-161
Heckman, James J. and Xuesong Li (2003) “Selection Bias, Comparative Advantage and Heterogeneous Returns to Education: Evidence from China in 2000”. IZA Discussion Paper No. 829.
Heckman, James J., Lance J. Lochner and Petra E. Todd (2003) “Fifty Years of Mincer Earnings Regressions”. NBER Working Paper No. 9732.
Lee, Lung-Fei (1983) “Generalized Econometric Models with Selectivity”. Econometrica, Vol. 51, No.2, pp. 507-512.
Loening, Ludger J. (2005) "Effects of Primary, Secondary and Tertiary Education on Economic Growth: Evidence from Guatemala". World Bank Policy Research Working Paper No. 3610.
Martínez Peláez, Severo (1971) “La patria del criollo”. Guatemala: Editorial Universitaria.
Marshall, Alfred (1890) “Principles of Economics”. 9th edition. London : Macmillan and Co. Limited for the Royal Economic Society , 1961.
Mincer, J. (1958) “Investment in Human Capital and Personal Income Distribution”. Journal of Political Economy, Vol. 66, No. 4., pp. 281-302.
Mincer, J. (1974) “Schooling, Experience, and Earnings”. New York: National Bureau of Economic Research.
Patrinos, Harry A. (1996) “Non-linearities in the returns to education: sheepskin effects or threshold levels of human capital?”. Applied Economics Letters, No. 3, pp. 171–173.
Psacharopoulos, G. (1982) “Upper Volta: Is it worth spending on education in a ‘high-cost’ country?”. Mimeo. Washington, DC: Education Department, The World Bank. Reference from Bennell (1996).
Psacharopoulos, G. (1995) “The Profitability of Investment in Education: Concepts and Methods”. Human Capital Development and Operations Policy Working Paper No. 63.
Psacharopoulos, G. (1996) “A Reply to Bennell”. World Development, Vol. 24, No. 1, pp. 201.
Psacharopoulos, G. and Ying Chu Ng. (1992) “Earnings and Education in Latin America: Assessing Priorities for Schooling Investments”. World Bank Policy Research Working Paper No. 1056.
Psacharopoulos, G. and Harry A. Patrinos. (2002) “Returns to Investment in Education: A Further Update”. World Bank Policy Research Working Paper No. 2881.
Schultz, T. Paul (2003) “Evidence of Returns to Schooling in Africa from Household Surveys: Monitoring and Restructuring the Market for Education”. Center Discussion Paper No. 875, Yale University.
Schultz, T.W. (1960) “Capital Formation by Education”. Journal of Political Economy, Vol. 68, No. 6., pp. 571-583.
Spengler, Joseph J. (1977) “Adam Smith on Human Capital”. The American Economic Review, Vol. 67, No. 1, Papers and Proceedings of the Eighty-ninth Annual Meeting of the American Economic Association, pp. 32-36.
Vakis, Renos (2003) “Guatemala: Livelihoods, Labor Markets, and Rural Poverty”. Guatemala Poverty Assessment Program, Technical Paper No. 1, World Bank.
van der Sluis, J., Mirjam van Praag and Arjen van Witteloostuijn (2004) “Comparing the Returns to Education for Entrepreneurs and Employees”. Unpublished. Wooldridge, Jeffrey (2002) “Econometric Analysis of Cross Section and Panel Data”. MIT Press.
Williams, D. (2002) “Returns to Education and Experience in Self-Employment: Evidence from Germany”. IRISS Working Paper Series No. 2002-04. World Bank (2003) “La Pobreza en Guatemala”. Informe No 24221-GU.