Convexity and sheepskin effects in the human capital earnings function: recent evidence for Filipino men
By: Schady, Norbert P.
Material type:
ArticlePublisher: 2003Description: p.171-96.Subject(s): Wages
In:
Oxford Bulletin of Economics and StatisticsSummary: The issue of possible non-linearities in the relationship between log wages and schooling has received a good deal of attention in the literature. This paper uses data from a recent, high quality household survey for the Philippines, the 1998 Annual Poverty Indicator Survey (APIS), to test the fit of the long-linear specification for Filipino men. The results are based on a number of estimation strategies, including spline regressions, and semi-parametric regressions with a large number of dummies for years of schooling and experience. The basic conclusions of the paper are two. First, there appear to be large differences between the rates of return to education across levels in the Philippines. In particular, the returns to both primary and secondary education are lower than those for tertiary education, a difference which persists even after correcting for differences in direct private costs across levels. Second, within a given level, the last year of schooling is disproportionately rewarded in terms of higher wages. That is, there are clear sheepskin effects associated with graduation from primary school, secondary school, and university. - Reproduced.
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
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Articles
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Indian Institute of Public Administration | Volume no: 65, Issue no: 2 | Available | AR57685 |
The issue of possible non-linearities in the relationship between log wages and schooling has received a good deal of attention in the literature. This paper uses data from a recent, high quality household survey for the Philippines, the 1998 Annual Poverty Indicator Survey (APIS), to test the fit of the long-linear specification for Filipino men. The results are based on a number of estimation strategies, including spline regressions, and semi-parametric regressions with a large number of dummies for years of schooling and experience. The basic conclusions of the paper are two. First, there appear to be large differences between the rates of return to education across levels in the Philippines. In particular, the returns to both primary and secondary education are lower than those for tertiary education, a difference which persists even after correcting for differences in direct private costs across levels. Second, within a given level, the last year of schooling is disproportionately rewarded in terms of higher wages. That is, there are clear sheepskin effects associated with graduation from primary school, secondary school, and university. - Reproduced.
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