IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-23-00218.html
   My bibliography  Save this article

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

    Download full text from publisher

    File URL: http://www.accessecon.com/Pubs/EB/2023/Volume43/EB-23-V43-I3-P102.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. Gong, Jie & Pan, Jessica, 2023. "The returns to an additional year of education for college graduates," Journal of Public Economics, Elsevier, vol. 218(C).
    4. James J. Heckman & Lance J. Lochner & Petra E. Todd, 2008. "Earnings Functions and Rates of Return," Journal of Human Capital, University of Chicago Press, vol. 2(1), pages 1-31.
    5. Anchor, John R. & Fiserová, Jana & Mars[iota]ková, Katerina & Urbánek, Václav, 2011. "Student expectations of the financial returns to higher education in the Czech Republic and England: Evidence from business schools," Economics of Education Review, Elsevier, vol. 30(4), pages 673-681, August.
    6. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, June.
    7. 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.
    8. Kopatz, Susanne & Pilz, Matthias, 2015. "The Academic Takes it All? A Comparison of Returns to Investment in Education between Graduates and Apprentices in Canada," International Journal for Research in Vocational Education and Training (IJRVET), European Research Network in Vocational Education and Training (VETNET), European Educational Research Association, vol. 2(4), pages 308-325.
    9. David J. Deming, 2022. "Four Facts about Human Capital," Journal of Economic Perspectives, American Economic Association, vol. 36(3), pages 75-102, Summer.
    10. Ardiana Gashi & Nicholas J. Adnett, 2022. "Estimating the returns to education in a chronically depressed labour market: the case of Kosovo," International Journal of Development Issues, Emerald Group Publishing Limited, vol. 21(3), pages 321-335, April.
    11. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:zna:indecs:v:19:y:2021:i:4:p:189-209 is not listed on IDEAS
    2. Ivar Kolstad & Arne Wiig, 2015. "Education and entrepreneurial success," Small Business Economics, Springer, vol. 44(4), pages 783-796, April.
    3. Krzysztof Kalisiak & Małgorzata Szreder & Kaja Białowąs, 2011. "Finansowy i niefinansowy zwrot z edukacji," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 9, pages 77-102.
    4. Stefan Gravemeyer & Thomas Gries & Jinjun Xue, 2008. "Discrimination, Income Determination and Inequality – The case of Shenzhen," Working Papers CIE 16, Paderborn University, CIE Center for International Economics.
    5. Stefan Gravemeyer & Thomas Gries & Jinjun Xue, 2011. "Income Determination and Income Discrimination in Shenzhen," Urban Studies, Urban Studies Journal Limited, vol. 48(7), pages 1457-1475, May.
    6. Sam Jones & Thomas Pave Sohnesen & Neda Trifkovic, 2023. "Educational expansion and shifting private returns to education: Evidence from Mozambique," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1407-1428, August.
    7. Backman, Mikaela, 2013. "Regional Variation of Returns to Education," Working Paper Series in Economics and Institutions of Innovation 300, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    8. Hector Espinoza & Stefan Speckesser, 2019. "A Comparison of Earnings Related to Higher Level Vocational/Technical and Academic Education," National Institute of Economic and Social Research (NIESR) Discussion Papers 502, National Institute of Economic and Social Research.
    9. Korpi, Tomas & Tåhlin, Michael, 2009. "Educational mismatch, wages, and wage growth: Overeducation in Sweden, 1974-2000," Labour Economics, Elsevier, vol. 16(2), pages 183-193, April.
    10. Lucia Mateos & Ines Murillo & Maria del Mar Salinas, 2014. "Desajuste educativo y competencias cognitivas: efectos sobre los salarios," Hacienda Pública Española / Review of Public Economics, IEF, vol. 210(3), pages 85-108, September.
    11. Mahfuza Khatun, 2015. "Experience, Education, and Entrepreneurial Success: A View from Bangladesh," Journal of Social and Development Sciences, AMH International, vol. 6(4), pages 71-81.
    12. Gábor R., István, 1999. "Mi a hasonlóság az egyetemi tanulmányok és a disznóól között?. Ajánlás és széljegyzetek. Varga Júlia: Oktatás-gazdaságtan Közgazdasági Szemle Alapítvány, Budapest, 1998. 162 oldal [What is the simi," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 576-582.
    13. Henderson, Daniel J. & Polachek, Solomon W. & Wang, Le, 2011. "Heterogeneity in schooling rates of return," Economics of Education Review, Elsevier, vol. 30(6), pages 1202-1214.
    14. Pablo Lavado & Nelson Oviedo & Hernán Ruffo, 2016. "Destruction of Cognitive and Noncognitive Skills in Adulthood," Working Papers 16-07, Centro de Investigación, Universidad del Pacífico.
    15. Aysit Tansel & Elif Oznur Acar, 2016. "The Formal/Informal Employment Earnings Gap: Evidence from Turkey," Research on Economic Inequality, in: Inequality after the 20th Century: Papers from the Sixth ECINEQ Meeting, volume 24, pages 121-154, Emerald Group Publishing Limited.
    16. Kenneth L. Sørensen & Rune Vejlin, 2014. "Return To Experience And Initial Wage Level: Do Low Wage Workers Catch Up?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(6), pages 984-1006, September.
    17. Bhuller, Manudeep & Mogstad, Magne & Salvanes, Kjell G., 2011. "Life-Cycle Bias and the Returns to Schooling in Current and Lifetime Earnings," IZA Discussion Papers 5788, Institute of Labor Economics (IZA).
    18. Kadir, Kadir & Weni Lidya, Sukma, 2019. "Returns to Education and Wages Distribution in Indonesia: A Comparison across Gender Groups," MPRA Paper 94929, University Library of Munich, Germany, revised 25 Apr 2019.
    19. Maria Klonowska-Matynia & Radosław Sobko, 2021. "Spatial Analysis of the Relationship between Health Capital and the Level of Health Care Expenditure in Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 133-151.
    20. Balestra, Simone & Backes-Gellner, Uschi, 2017. "Heterogeneous returns to education over the wage distribution: Who profits the most?," Labour Economics, Elsevier, vol. 44(C), pages 89-105.
    21. Christina Langer & Simon Wiederhold, 2023. "The Value of Early-Career Skills," Working Papers 222, Bavarian Graduate Program in Economics (BGPE).

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-23-00218. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.