Estimating the Returns to Education : Accounting for Heterogeneity in Ability

38 Pages Posted: 20 Apr 2016

See all articles by Harry A. Patrinos

Harry A. Patrinos

University of Arkansas, Fayetteville - Department of Education Reform

Cristobal Ridao-Cano

World Bank - Development Research Group (DECRG)

Chris Sakellariou

Nanyang Technological University (NTU)

Date Written: October 1, 2006

Abstract

Typically estimates of the benefits of education investments show average private rates of return for the average individual. The averagemay 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

Suggested Citation

Patrinos, Harry Anthony and Ridao-Cano, Cristobal and Sakellariou, Christos, Estimating the Returns to Education : Accounting for Heterogeneity in Ability (October 1, 2006). World Bank Policy Research Working Paper No. 4040, Available at SSRN: https://ssrn.com/abstract=938273

Harry Anthony Patrinos (Contact Author)

University of Arkansas, Fayetteville - Department of Education Reform ( email )

201 Graduate Education Building
Fayetteville, AR 72701
United States

Cristobal Ridao-Cano

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

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

Christos Sakellariou

Nanyang Technological University (NTU) ( email )

04-64, 14 Nanyang Drive
Singapore, 637332
Singapore

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