RT Journal Article
SR Electronic
T1 Heterogeneous Economic Returns to Postsecondary Degrees: Evidence from Chile
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
DO 10.3368/jhr.51.2.0213-5474R1
A1 Rodríguez, Jorge
A1 Urzúa, Sergio
A1 Reyes, Loreto
YR 2015
UL http://jhr.uwpress.org/content/early/2015/11/20/jhr.51.2.0213-5474R1.abstract
AB We analyze the economic returns to postsecondary degrees in Chile. We posit a schooling decision model with unobserved ability, degree-specific tuition costs, and earnings. We use administrative records to carry out our empirical analysis. Our results show positive average returns to postsecondary education, especially for five-year degrees. However, we also uncover significant heterogeneity. We document how unobserved characteristics (ability) determine the economic benefits of first- and second-best choices, even leading to negative returns to postsecondary degrees. Our findings illustrate the importance of allowing for heterogeneous treatment effects and individual’s choices when examining the returns to education.