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Endogeneity, computers, language skills and wages among university graduates in Vietnam

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  • Chris Sakellariou

Abstract

One would expect that returns to supplementary skills in developing countries are considerably higher, compared to those documented for developed countries (as is the case with returns to schooling). I derive estimates of returns to the use of computer and foreign language skills in Vietnam after controlling for endogeneity, using a binary instrument hypothesized to reflect reconstruction (Doi Moi) policies in Vietnam. I find that (a) the use of both computers and language skills is associated with very large earnings premiums (b) IV return estimates are as high as and sometimes higher than OLS estimates, however, they should be interpreted in relation to the instrument used.

Suggested Citation

  • Chris Sakellariou, 2009. "Endogeneity, computers, language skills and wages among university graduates in Vietnam," Applied Economics, Taylor & Francis Journals, vol. 41(5), pages 653-663.
    • Handle: RePEc:taf:applec:v:41:y:2009:i:5:p:653-663
    DOI: 10.1080/00036840601007377
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    References listed on IDEAS

    as
    1. Lex Borghans & Bas ter Weel, 2011. "Computers, skills and wages," Applied Economics, Taylor & Francis Journals, vol. 43(29), pages 4607-4622.
    2. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
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    4. Michael J. Handel, 2007. "Computers and the Wage Structure," Research in Labor Economics, in: Aspects of Worker Well-Being, pages 157-198, Emerald Group Publishing Limited.
    5. repec:fth:prinin:419 is not listed on IDEAS
    6. Borghans, Lex & ter Weel, Bas, 2004. "Are computer skills the new basic skills? The returns to computer, writing and math skills in Britain," Labour Economics, Elsevier, vol. 11(1), pages 85-98, February.
    7. Harry A. Krashinsky, 2000. "Do Marital Status and Computer Usage Really Change the Wage Structure? Evidence from a Sample of Twins," Working Papers 818, Princeton University, Department of Economics, Industrial Relations Section..
    8. Thomas J. Kane & Cecilia Elena Rouse & Douglas Staiger, 1999. "Estimating Returns to Schooling When Schooling is Misreported," NBER Working Papers 7235, National Bureau of Economic Research, Inc.
    9. de New, John & Schmidt, Christoph M., 1999. "Money for Nothing and Your Chips for Free? The Anatomy of the PC Wage Differential," IZA Discussion Papers 86, Institute of Labor Economics (IZA).
    10. Lex Borghans & Bas ter Weel, 2011. "Computers, skills and wages," Applied Economics, Taylor & Francis Journals, vol. 43(29), pages 4607-4622.
    11. Thomas J. Kane & Cecilia Rouse & Douglas Staiger, 1999. "Estimating Returns to Schooling When Schooling is Misreported," Working Papers 798, Princeton University, Department of Economics, Industrial Relations Section..
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    Cited by:

    1. Oosterbeek, Hessel & Ponce, Juan, 2011. "The impact of computer use on earnings in a developing country: Evidence from Ecuador," Labour Economics, Elsevier, vol. 18(4), pages 434-440, August.

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