Endogeneity of schooling in the wage function | Land Portal

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Date of publication: 
janvier 1998
ISBN / Resource ID: 
125679
Pages: 
vii, 54 pages : tables 28 cm.
Copyright details: 
IFPRI adheres to the basic tenets of the Budapest Open Access Initiative, articulated in 2002 (subject to any applicable third-party rights and or confidentiality obigations). All applicable data are subject to IFPRI’s Institutional Review Board (IRB) guidelines. Copyright © 2013 International Food Policy Research Institute (IFPRI). All rights reserved.

This paper evaluates the effect (in terms of private returns) of investment in education on wages in the rural Philippines. Statistical endogeneity of education in the wage function may result from (1) unobserved determinants of education that also influence wages and/or (2) measurement error. Panel data are used that provide relevant instruments, particularly distance to schools and measures of household resources, at the time of schooling, to endogenize investments in education while estimating wage functions. The estimated return to education increases more than 60 percent when education is endogenized. This increase is robust to the inclusion of a measure of health, models of selection into the sample, and measurement error. The paper suggests how heterogeneous returns to education might account for the magnitude of the downward bias in returns to schooling.

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The International Food Policy Research Institute (IFPRI) provides research-based policy solutions to sustainably reduce poverty and end hunger and malnutrition in developing countries. Established in 1975, IFPRI currently has more than 500 employees working in over 50 countries. It is a research center of theCGIAR Consortium, a worldwide partnership engaged in agricultural research for development.


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About IFPRI


The International Food Policy Research Institute (IFPRI) provides research-based policy solutions to sustainably reduce poverty and end hunger and malnutrition in developing countries. Established in 1975, IFPRI currently has more than 500 employees working in over 50 countries. It is a research center of theCGIAR Consortium, a worldwide partnership engaged in agricultural research for development.


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