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Estimating returns to education: back to the short-cut

Author

Listed:
  • Harry A Patrinos

    (World Bank)

  • George Psacharopoulos

    (ex-World Bank, former-London School of Economics)

Abstract

Estimates of the rate of return to investment in education have been the subject of an explosive literature in recent years papers. Most estimates come from the Mincerian earnings function. A less well-known method – the short-cut – offers an efficient means of quickly estimating returns with limited data. It has the added benefit of allowing for easy incorporation of public costs of schooling. Only needing grouped earnings by level of education the short-cut method the method is becoming popular again, especially in cases where lack detailed data, especially in developing countries.

Suggested Citation

  • Harry A Patrinos & George Psacharopoulos, 2023. "Estimating returns to education: back to the short-cut," Economics Bulletin, AccessEcon, vol. 43(3), pages 1208-1213.
    • Handle: RePEc:ebl:ecbull:eb-23-00218
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2023/Volume43/EB-23-V43-I3-P102.pdf
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    References listed on IDEAS

    as
    1. Gong, Jie & Pan, Jessica, 2023. "The returns to an additional year of education for college graduates," Journal of Public Economics, Elsevier, vol. 218(C).
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    3. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    4. Jacob Mincer, 1962. "On-the-Job Training: Costs, Returns, and Some Implications," NBER Chapters, in: Investment in Human Beings, pages 50-79, National Bureau of Economic Research, Inc.
    5. David J. Deming, 2022. "Four Facts about Human Capital," Journal of Economic Perspectives, American Economic Association, vol. 36(3), pages 75-102, Summer.
    6. Colm Harmon & Hessel Oosterbeek & Ian Walker, 2003. "The Returns to Education: Microeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 115-156, April.
    7. Mahdi Barouni & Stijn Broecke, 2014. "The Returns to Education in Africa: Some New Estimates," Journal of Development Studies, Taylor & Francis Journals, vol. 50(12), pages 1593-1613, December.
    8. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    Returns to education; wages; short-cut;
    All these keywords.

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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