Do Returns to Education Depend on How and Who You Ask?

40 Pages Posted: 7 Jul 2016

See all articles by Pieter M. Serneels

Pieter M. Serneels

University of Oxford - Centre for the Study of African Economies (CSAE)

Kathleen Beegle

World Bank - Development Research Group (DECRG)

Andrew Dillon

International Food Policy Research Institute (IFPRI)

Abstract

Returns to education remain an important parameter of interest in economic analysis. A large literature estimates returns to education in the labor market, often carefully addressing issues such as selection, both into wage employment and in terms of completed schooling. There has been much less exploration whether estimated returns are robust to survey design. Specifically, do returns to education differ depending on how information about wage work is collected? Using a survey experiment in Tanzania, this paper investigates whether survey methods matter for estimating mincerian returns to education. Results show that estimated returns vary by questionnaire design, but not by whether the information on employment and wages is self-reported or collected by a proxy respondent (another household member).The differences due to questionnaire type are substantial varying from 6 percentage points higher returns to education for the highest educated men, to 14 percentage points higher for the least educated women, after allowing for non-linearity and endogeneity in the estimation of these parameters. These differences are of similar magnitudes as the bias in OLS estimation, which receives considerable attention in the literature. The findings underline that survey design matters for the estimation of structural parameters, and that care is needed when comparing across contexts and over time, in particular when data is generated by different surveys.

Keywords: returns to education, survey design, field experiment, development, Africa

JEL Classification: J24, J31, C83

Suggested Citation

Serneels, Pieter M. and Beegle, Kathleen and Dillon, Andrew, Do Returns to Education Depend on How and Who You Ask?. IZA Discussion Paper No. 10002. Available at SSRN: https://ssrn.com/abstract=2803834

Pieter M. Serneels (Contact Author)

University of Oxford - Centre for the Study of African Economies (CSAE) ( email )

Oxford OX1 3UL
United Kingdom

Kathleen Beegle

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/kbeegle

Andrew Dillon

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

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