Are There Skills Payoffs in Low- and Middle-Income Countries? : Empirical Evidence Using STEP Data
Most research on the economic payoffs of skills has used individuals' level of schooling attained -- typically years or level of education or training received—as a key proxy for skills. Such research has consistently found that individual ret...
| 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/231391478194467051/Are-there-skills-payoffs-in-low-and-middle-income-countries-empirical-evidence-using-STEP-data http://hdl.handle.net/10986/25678 |
| Summary: | Most research on the economic payoffs of
skills has used individuals' level of schooling
attained -- typically years or level of education or
training received—as a key proxy for skills. Such research
has consistently found that individual returns to schooling
are positive and that returns tend to be higher in low- and
middle-income countries than in higher-income countries.
However, years in school is only one proxy for skills -- are
these returns still observed using other measures as
proxies? This study uses data from the STEP Skills
Measurement Survey to examine the extent to which there is
an independent association between cognitive and
noncognitive skills and earnings in low- and middle-income
countries. The study uses measures of reading proficiency
and complexity of on-the-job computer tasks to proxy
cognitive skills, and personality and behavioral measures to
proxy noncognitive skills. The results demonstrate that even
when controlling for schooling and background factors, these
skills pay off in the labor market. This is particularly the
case for the measures of cognitive skills, while
noncognitive skills show some significant, but small,
effects on earnings. The findings also suggest that there is
significant heterogeneity across countries in how skills are
valued in the labor market. |
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