Human Development East Asia Pacific (2008)
BibTeX
@MISC{Carneiro08humandevelopment,
author = {Pedro Carneiro and Michael Lokshin and Cristobal Ridao-cano and Nithin Umapathi and World Bank},
title = {Human Development East Asia Pacific},
year = {2008}
}
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Abstract
We estimate heterogeneity in returns to schooling in Indonesia using a non-parametric method of local instrumental variables. In this paper we estimate average and marginal returns to upper secondary schooling in Indonesia, using data from the Indonesia Family Life Survey (IFLS). In order to account for the fact that schooling is unlikely to be exogenous in the population, we instrument the schooling choice with the distance to the nearest secondary school, measured in traveling time. We do not focus on a single instrumental variable parameter, but instead we estimate a range of average returns for different individuals. In particular, we estimate the marginal treatment effect. We estimate that the return to upper secondary schooling varies widely across individuals with unobserved characteristics: it can be as high as 200 % or as low as 0%. Our results can be informative about the distributional consequences of extending the upper secondary schooling system.
Keyphrases
human development east asia pacific different individual upper secondary schooling varies single instrumental variable parameter local instrumental variable secondary school average return distributional consequence upper secondary schooling system upper secondary schooling unobserved characteristic indonesia family life survey non-parametric method marginal treatment effect marginal return schooling choice
