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External Returns to Higher Education in Mexico 2000-2010

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  • Isidro Soloaga

    (Department of Economics, Universidad Iberoamericana, Mexico City. Mexico)

  • Mariana Pereira

Abstract

This paper estimates the external returns to higher education in Mexico using cross-sectional micro data from the 2000 and 2010 censuses’ samples. Because of identification problems, which according to the literature are the main challenge in this kind of model, an instrumental variable approach is used, taking the demographic structure as an instrument for the share of college graduates in a Metropolitan Area (MA). Results indicate that a one percentage point increase in the share of college graduates in Mexico increases the regression-adjusted average wages of an MA in more than six percent over a 10-year period. The constant composition approach is used to assess whether these effects are mainly due to externalities or to supply movements along a downward sloping demand. Part of the external returns to a higher share of college graduates is the result of externalities from direct or indirect interaction with these individuals. There appears to be heterogeneity in the magnitude of the spillovers according to educational level.

Suggested Citation

  • Isidro Soloaga & Mariana Pereira, 2013. "External Returns to Higher Education in Mexico 2000-2010," Working Papers 0313, Universidad Iberoamericana, Department of Economics.
    • Handle: RePEc:uic:wpaper:0313
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    Cited by:

    1. Yuming Fu & Yang Hao, 2015. "An Urban Accounting for Geographic Concentration of Skills and Welfare Inequality," ERSA conference papers ersa15p734, European Regional Science Association.

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    More about this item

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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