The Impact of Schooling Reform on Returns to Education in Malaysia

Ismail, Ramlee (2007): The Impact of Schooling Reform on Returns to Education in Malaysia.

Abstract

The objective of this paper is to examine the impact of education reforms on earnings. One of the significant changes in the Malaysian education system was the schooling reform of 1970 that changed the medium of instruction from the English language to the Malaysian national language. Using data from the Household Income Surveys of 2002 and 2004, this paper updates the private rate of return to education. Applying a homogenous return model, using an ordinary least square (OLS) regression indicates that the private rate of returns to education is close to the world average. Using the Instrumental Variable approach, however, the impact of the schooling reforms indicates that the private rate of return to education is higher than the average.

• Item Type: MPRA Paper
• Language: English
• Keywords: human capital; instrumental variables; rate of return to education
• Subjects: A - General Economics and Teaching > A2 - Economic Education and Teaching of Economics > A20 - General; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I21 - Analysis of Education; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity

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