Working Paper: CEPR ID: DP8689
Authors: Pedro Carneiro; Michael Lokshin; Cristobal Ridaocano; Nithin Umapathi
Abstract: This paper estimates average and marginal returns to schooling in Indonesia using a non-parametric selection model. Identification of the model is given by exogenous 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 percent per year of schooling for those very likely to enroll in upper secondary schooling, or as low as -10 percent for those very unlikely to do so. Average returns for the student at the margin are well below those for the average student attending upper secondary schooling.
Keywords: average return; marginal return; marginal treatment effect; return to education
JEL Codes: J2; J3; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| distance to nearest secondary school (I21) | wages (J31) |
| upper secondary schooling (I23) | wages (J31) |
| reducing distance to upper secondary schooling by 10 kilometers (I21) | return for those induced to attend (C92) |
| distance to nearest secondary school (I21) | early educational outcomes (I21) |