Do Returns to Education Depend on How and Who You Ask?
Returns to education remain an important parameter of interest in economic analysis. A large literature estimates returns to education in the labor market, often carefully addressing issues such as selection, into wage employment and in terms of co...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/07/26579299/returns-education-depend-ask http://hdl.handle.net/10986/24827 |
| Summary: | Returns to education remain an important
parameter of interest in economic analysis. A large
literature estimates returns to education in the labor
market, often carefully addressing issues such as selection,
into wage employment and in terms of completed schooling.
There has been much less exploration of whether estimated
returns are robust to survey design. Specifically, do
returns to education differ depending on how information
about wage work is collected? Using a survey experiment in
Tanzania, this paper investigates whether survey methods
matter for estimating mincerian returns to education. The
results show that estimated returns vary by questionnaire
design, but not by whether the information on employment and
wages is self-reported or collected by a proxy respondent
(another household member). The differences due to
questionnaire type are substantial varying from 6 percentage
points higher returns to education for the highest educated
men, to 14 percentage points higher for the least educated
women, after allowing for non-linearity and endogeneity in
the estimation of these parameters. These differences are of
similar magnitudes as the bias in OLS estimation, which
receives considerable attention in the literature. The
findings underline that survey design matters for the
estimation of structural parameters, and that care is needed
when comparing across contexts and over time, in particular
when data is generated by different surveys. |
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