Aug 15, 2012

Return to schooling by country

The returns to education in Brazil are the highest at all quintiles compared to other countries, Guatemala follows. That is from the paper "Heterogeneous Returns to Education in the Labor Market" by Fasih et al (August 2012). The paper is interesting and novel because it looks at rates of return at different levels of the income distribution. Very cool! 

The paper has data, and graphs, for other regions in the world. Very interesting cases: Cambodia has high returns in Asia. In the sample of Africa, Kenya has the lowest returns at the lower quintiles but the highest returns at the higher quintiles. 

The upward slopping shape of the curves means that the income that a person earns from an extra year of education is lower for lower income people and increases as income raises. In short the the returns to education are higher for the richer. 

What is interesting is that other regions and countries do not have upward sloping curves, such as China, Pakistan, or Ghana. Asia is very interesting because some of the curves are downward sloping, the returns are higher for the poorer (or not as rich). Latin America is more similar to Tanzania, Kenya and Singapore.

Latin America is quite especial indeed. 

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