Where Have All the Educated Workers Gone? Services and Wage Inequality in Three Asian Economies

32 Pages Posted: 6 Jun 2013

See all articles by Aashish Mehta

Aashish Mehta

University of California, Santa Barbara (UCSB)

Jesus Felipe

Asian Development Bank

Pilipinas Quising

Asian Development Bank - Economic Research

Shiela F. Camingue

Asian Development Bank - Economic Research

Date Written: July 2013

Abstract

The wage returns to college have risen relative to those to secondary education in many developing economies. In India, the Philippines and Thailand, this is related to the expansion of services employment. We show this using decompositions connecting shifts in the returns to education to changing job opportunities. High‐skill services employment grew slowly while relative demand in the sector shifted from secondary to college graduates, pushing workers with secondary education into low‐skill intensive services. These polarizing trends in services employment account for the growing convexity of the Mincerian wage profile, and may constrain governments seeking to use educational expansion to alter the wage distribution.

Suggested Citation

Mehta, Aashish Sunil and Felipe, Jesus and Quising, Pilipinas and Camingue, Shiela F., Where Have All the Educated Workers Gone? Services and Wage Inequality in Three Asian Economies (July 2013). Metroeconomica, Vol. 64, Issue 3, pp. 466-497, 2013, Available at SSRN: https://ssrn.com/abstract=2275143 or http://dx.doi.org/10.1111/meca.12014

Aashish Sunil Mehta (Contact Author)

University of California, Santa Barbara (UCSB) ( email )

Santa Barbara, CA 93106
United States

HOME PAGE: http://www.global.ucsb.edu/people/aashish-mehta

Jesus Felipe

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Pilipinas Quising

Asian Development Bank - Economic Research ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Shiela F. Camingue

Asian Development Bank - Economic Research ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

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