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Average and Marginal Returns to Upper Secondary Schooling in Indonesia

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  • Pedro Carneiro
  • Michael Lokshin
  • Nithin Umapathi

Abstract

This paper estimates average and marginal returns to schooling in Indonesia using a semiparametric selection model. Identification of the model is given by geographic variation in access to upper secondary schools. We find that the return to upper secondary schooling varies widely across individuals: it can be as high as 50% per year of schooling for those very likely to enroll in upper secondary schooling, or as low as −10% for those very unlikely to do so. Average returns for the student at the margin are substantial, but they are also well below those for the average student attending upper secondary schooling. Copyright © 2016 John Wiley & Sons, Ltd.

Suggested Citation

  • Pedro Carneiro & Michael Lokshin & Nithin Umapathi, 2017. "Average and Marginal Returns to Upper Secondary Schooling in Indonesia," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 32(1), pages 16-36, January.
    • Handle: RePEc:wly:japmet:v:32:y:2017:i:1:p:16-36
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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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