Earnings and Education in Latin America - George Psacharopoulus

,JV
WPQ80
Policy Research
WORKING PAPERS
Educationand Employment
Department
Technical
LatinAmericaand the CaribbeanRegion

The WorldBank
December1992
WPS 1056
Earningsand Education
in LatinAmerica
AssessingPriorities
for SchoolingInvestments
George Psacharopoulos
and
YingChu Ng
In most Latin Americancountries, the earnings premium receivedby graduatesof highereducationdecreasedin the 1980s.
Investmentin primaryeducationshowsthe highestrate of return
among all levels considered.
ideasamongBankstaff
thefindingsof workin progressandencouragetheexchangeof
ThePolicyResearchWorkingPapersdissemninate
bytheResearchAdvisoryStaff,carrythenamesof theauthors,
andall othersinterestedindevloprenttissues Thesepapers,distLibuted
andconclusionsaretheauthors'own.They
reflectonlytheirviews,and
shouldbeusedandcitedaccordingly.Thefmdings,intespretations,
shouldnot be attributedto theWorldBank,its Boardof Dircwtors,its management,or any of its membercountries.
PolicyResearchl
Educationand Employment
WPS 1056
This paper- a product of the Technical Department, Latin America and the Caribbean Region - is part
of a larger effort in the department to document the role of education in the region's development efforts.
Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433.
Please contact Liliana Longo, room 14-187, extension 39244 (December 1992, 93 pages).
Psacharopoulos and Ng use household survey
dzta for 18 Latin American countries to assess
earnings differentials by level of education, and
to assess how these differentials changed in the
1980s.
Introducing the cost of education allows
them to estimate private and social rates of return
on investments on education across several
dimensions: by gender, by level of education, by
sector of employment, by nature of the secondary school curriculum, and over time.
The results show that, in most countries, the
earnings premium received by graduates of
higher education decreased in the 1980s. Investment in primary education shows the highest rate
of return among all levels considered - and is
still the number one investment priority in most
countries.
The PolicyResearchWorkingPaperSeriesdisseminatesthefindingsof workunderwayin theBank.Anobjectiveof theseries

is to get these findingsout quickly,even if presentationsare less than fully polished.The findings,interpretations,and
conclusionsin thesepapersdo not necessarilyrepresentofficialBankpolicy.
Producedby the PolicyResearchDisseminationCenter
EARNINGS AND EDUCATION IN LATIN AMERICA:

ASSESSING PRIORITIES FOR SCHOOLING INVESTMENTS
George Psacharopoulos
Ying Chu Ng
Technical Department
Latin America and the Caribbean Region
The World Bank
TAxi OF CONTW8
I. Introduction .. .. .. . .. .,,,,,.,,,,.,
.........
.... v.
.1
II. Methodology ...................................

The Full Discounting or Elaborate Method ................
The Earnings Function Method ...............................
The Short-cut Method .
.........
. .....
.
III.Empirical Findings
.....
.
..
..
6
,......
.............
..
..
.....
. ...
.
Basic EarningsFunctions ...................................

OvertimeChangesin Relative Earnings
..
Overtime Returns to Education .......................
.....
Extended Earnings Functions ....
..
.............
. .
......
SecondaryGeneral
versus Vocational
Education
...
.
...........
Private Returns to Education
...................
Social Returns to Education .... ...................
......
IV. Conclusion ...
.......
9
14
20
25
28
29
31
. 37
References .......
39
Annex1. Survey Data Description.0.00000.....0.0.0.41

Annex2. VariableDefinitions ..
..
....
Annex3. BasicEanings Functions .....

Annex 4. Extended Earnings Functions .....
.44
0.0......
.............
............
0...
48
77
LIST OF TABLES
1. Mean Earnings, Years of Schoolingand Mincerian Returns to Education: Entire

Sample, circa 1989 ...........
;.......
10
2. Mean Earnings, Years of Schoolingand MincerianReturns to Education:by Gender,

circa 1989
....
..
12
3. Mean Eamings, Years of Schoolingand MincerianRetums to Education: by Sector,

circa 1989..
13
4. Over Time Earnings Differentialsby EducationalLevel .15

5. Over Time EducationalAttainmentof the Labor Force .18
6. Mean Earnings, Years of Schooling and Mincerian Returns to Education: Entire
Sample, circa 1980
...............
.21
7. Mean Earnings, Years of Schoolingand Mincerian Returns to Education: by Gender,

circa 1980
..
22
8. Mean Earnings, Years of Schoolingand Mincerian Returns to Education: by Sector,

circa 1980 .24
9. Mean Earnings and Mincerian Returns to Education: by Level of Education ......
26
10. Private Retums to Educationby Level of Education: Full Method .30

11. Social Direct Unit Cost per Year by Level of Education.33
12. Social Returns to Educationby Level of Education:Full Method
13. Index of Public Subsidizationof Education by Level
......
35
38
Lwsr OFFIGURES
1. Age - Earnings Profiles by Level of Education, Brazil 1989 ................

2. Time Trend of Earnings Differentials by Level of Education in Four Countries ....
5
17
I. INTRODUCrION
The study of the relationshipbetween earnings and education has been the cornerstone
of the economics of education. There are several reasons why this relationship has been
investigated extensively throughout the world since "human capital" was established in the
economic growth and developmentliterature in the early 1960s (see Schultz, 1961).
First, differencesin mean earnings between graduatesof successivelevels of education

reflect the premium associated with educational investment. This premium is definitely
"private", in the sense that it accrues to the person who undertook the investment. Under
certain conditions, however, this premium can also be used as a proxy for the higher social
productivityof the graduate, e.g. as evidencedby earningsdifferentialsin the competitivesector
of the economy. Thus, earnings differentials by level of education provide an expedient,
empirical way of documenting first order relative scarcities in the market for graduates in a
given society, and may provide a guide for educationalinvestments.
Second, the above earnings premium can be combined with the cost (either private or
social) of investing in different levels of education, thus leading to a cost-benefit analysis of
investmentin schooling,which is very similarto traditionalcost-benefitanalysisin other sectors
of the economy. Since the 1960s there has been an immense literature devoted to the
profitability of investmentsin human capital. Estimates of such profitability are better known
as "rates of return to investmentin education"(for a review see Psacharopoulos, 1985a).
-2Third, and beyond the above efficiencyconsiderations,the earnings premium associated

with different levels of education leads to equity assessmentsin a given society, e.g. how does
the provision of education, and at what level, contributesto poverty alleviationor a more equal
income distribution?
The purpose of this paper is to present evidenceon the relationshipbetween earningsand

education in Latin America for the latest year possible, and to discuss the implicationsof the
findingsfor school investmentpriorities in the region. The analysisis necessarilymacro, in the
sense that a large number of countries has been covered, using a consistent methodology,
althoughat the expense of performing more detailedwithin-countryanalyses. Thus the findings
presented here should be consideredas indicativeregarding educationalinvestmentpriorities in
the region, pending more detailed country-specificwork.
This study improves upon the previous cross-country studies by applying a consisten.
mrethodologyof estimation!'. Moreover, the database comes from representativenational data
sets of the countries in question. The data also allow for the study of time trends of rates of
return to cducation, as well as assessing the profitability of different types of the secondary
school curriculum.
The next section presents the methodologyof estimation, followed by a sectionon the
evidence. The implicationsof the findings are discussedin the concluding section.
I/ Previousstudieson the returnsto educationin LatinAmericaare listedin the Peferences.
-3II. MErHODOLOGY
Estimates of the profitabilityof investmentin educationcan be arrived at using different

methods. The methodadoptedby various authors is often dictatedby the nature of the available
data. In what follows we briefly describe the availablemethodsas backgroundto the estimates
,we present later in this paper.
(1)
The Full Discountinlgor Elaborate Method

This method amountsto finding the discount rate (r) that equates a stream of benefits to
a stream of costs at a given point in time:

(y(+C)C(+r)
*
=
:-+1(
+r)
(1)
t-I
where (Yb-Ya)tis the earnings differentialbetweena more educated person (subscript b) and a
less educatedperson (subscripta, the controlgroup). Cb represents the direct costs of schooling
consisting of tuition and fees, books, etc., and Y. denotes the student's foregone earnings or
indirect costs.
On the assumptionthat the direct costs of acquiring the next higher level of education are
roughly the same as the income one would earn from part-timeor summerjob during the study,
equation (1) can be simplifiedto:
-4t r)'
*"1
S(Y,)S(l
+r)
(2)
Thereis an importantasymmetrybetweencomputingthe returnsto primaryeducation

and thoseto the otherlevels. Primaryschoolchildren,mostlyaged6 to .2 years,do not forego
earningsduringthe entirelengthof theirstudies. In theempiricalanalysisthat followswe have
assumedonly two years of foregoneearningsfor primaryschoolchildren.
The resultingr by solvingthe aboveequationcan be consideredto be a "private"rate

of return. When the direct cost paid by the individualis replacedby the true full cost of
someone'seducation(paidby the statein mostcountries)one can arrive at a "social"rate of
return. Privaterates of return are used to explainpeople's behaviorin seekingeducationof
differentlevelsand types, and as distributivemeasuresof the use of publicresources. Social
rates of return,on the otherhand,can be usedto set investmentprioritiesfor futureeducational
investments.
The discoundngof actual net age-earningsprofilesis the most appropriatemethodof

estimatingthe returnsto educationbecauseit takesintoaccountthe mostimportantpart of the
earlyearninghistoryof the individual. But this methodis very thirstyin termsof data -- one
must have a sufficientnumber of observationsin a given age-educationallevel cell for
constructing"well-behaved"age-earningsprofiles. (An exampleof such profile is given in
Figure 1.) This has beenrarelythe case in the earlydaysof the economicsof education,and
thus researchershave resortedto lessdata-demanding
methods.
iXf
<
Co
%.~~~~~~~
0~~
o~~
-
o
r
-6-
(2)
The EarningsFunctionMethod
This method is derived from Mincer (1974) and involves the fitting of a function
specifiedas:
In1I- a +,PSI+Y,EX
4 +Y2EX2+eI,
(3)
where S is the numberof years of schoolingof individuali, and EX and EX2 are years of
experienceand its square, respectively. Oftenweeks-workedor hours-workedare added as
independentvariablesto this functionas compensatoryfactors. We call the above a "basic
earningsfunction." In this semi-logspecificationthe coefficientof S (O)can be interpretedas
the average private rate of return to one additionalyear of schooling,regardlessof the
educationallevel this year of schoolingrefers to.
The earningsfunctionmethodcan be usedto estimatereturnsto educationat different

levels by convertingthe continuousyears of schoolingvariable(S) into a series of dummy
variables, say PRIM, SEC, UNIV, to denote the fact that a person has completedthe
correspondinglevelof education,and that of coursethereare also peoplein the samplewithno
educationin order to avoidmatrixsingularity.
Then, after fittingthe following"extendedearningsfunction":

lnYI' g+P,PR!M
1+f32SEC,+P,UN7Vl+y
1EX1+y2Ei+e.
(4)
the private rate of return to different levels of education can be derived from the following
formulas:
r(PRJM =
SPRIM
r(m
TU
t
SSEC-S
S-
where SpRIM,
SsEc,and SU,Vstand for the total numberof years of schooling for each successive
level of education(primary educationcompleted,secondaryeducationcompleted,and university
educationcompleted,respectively). Again, care has to be taken regarding the foregone earnings
of primary school-agedchildren. In the empirical analysis that follows we have assigned only
two years of foregone earnings to this group.
Althoughconvenient, because it requires less data, this methodis slightly inferior to the
previousone as it in fact assumesflat age-earningsprofiles for differentlevels of education (see
Psacharopoulosard Layard, 1979).
-8 (3)
The Short-cutMethod
This estimation method is based on a simple formula:
*= S(t*-,)
where Y refers to the mean earnings of an individualwith the subscripted educationallevel, k

is the higher educationallevel in the comparison,and AS represents the difference in years of
schoolingbetween k and the control group.
Althoughthis method is very easy to use, it is by definitionvery inferior relative to,any

of the other methodsdescribedabove. The weaknessof the method lies in the abstraction from
the fact that age-earningsprofiles are concave (see Figure 1), and that the discountingprocess
(in estimating the true rate of return) is very sensitive to the values of the early ages entering
the calculation. Hence we will not use this method in the empirical analysis that follows.
IH. EMPIRCALFmDIGS
The data used in this analysiscome from a series of HouseholdSurveysconductedin the

region around 1989. For some countries the same survey was also conducted around 1980.
Details on the nature of the surveys appear in Annex 1. Variable definitionsappear in Annex
2.
-9-
A. Basic Earnings Functions

As a way of summarizingthe data, we first fit basic earnings functions (see Annex 3).
Table 1 shows the resulting average rate of return, along with the mean years of schooling of
the sample. In comparing mean years of schoolingacross counties, it should be noted that the
countries with the highest mean years of schooling,Bolivia and Peru, refer to urban samples.
Among the eighteencountries, twelveof them have an average return to schoolingof 10

percent or above. The mean of years of schoolingranges from 4.3 to 10.1 years. The lowest
mean years of schooling are found in Guatemala and Brazil, while Boliviansand Peruvians
generally have more than 10 years of schoolingbecause of the urban nature of the samples. It
is not surprising, therefore, to find that the average private rate of return to schoolingin Bolivia
and Peru is relatively lower than that in Guatemalaand Brazil.
- 10
Table.it Mean Earnings, Years of Schoolingand Mlncerian Returns to Education:

Entlre Samplecirca 1989
Country
Survey
Earnings
Mean
Rateof
Year
(in local
currency)
Years of
Schooling
Return (%)y
Argentina
1989
7,456
9.1
10.3
Bolivia
1989
364
10.1
7.1
Brazil
1989
6,969
5.3
14.7
Chile
1989
40,275
8.5
12.0
Colombia
1989
53,643
8.2
14.0
Costa Rica
1989
16,346
6.9
10.9
DominicanRepublic 1989
652
8.8
9.4
Ecuador
1987
27,313
9.6
10.8
El Salvador
1990
899
6.9
9.7
Guatemala
1989
242
4.3
14.9
Honduras
1989
453
6.5
17.6
Jamaica
1989
5,886
7.2
28.8
Mexico
1984
81,029
6.6
14.1
Panama
1989
292
9.2
13.7
Paraguay
1990
239,861
9.1
11.5
Peru
1990
9,912
10.1
8.1
Uruguay
1989
145,840
9.0
9.7
Venezuela
1989
6,894
9.1
8.4
Source:Annex3.
Notes: I' Coefficientof theyears-of-schooling
variablein thebasicearningsfunction,times100.
11 -
The earnings functions have been fitted to male and female sub-samples in order to
examine differences in returns to education by gender. As seen in Table 2, working females
generally attain more educationthan their male counterpartsin all countriesexcept Ecuador, El
Salvador, Paraguay, and Peru. This, however, does not gives femalesan advantageover males
in acquiring better pay in absolute terms. The mean earnings of each country shows that males
in fact earn more than females2'. However, the rate of return being a reli
concept, this
does not prevent females realizing a higher payoff than men to their schooling investment in
fifteen out of the eighteen cases reported in Table 2.
Table 3 presents the results of an alternativepartitioningof the sample into public and
private employment. As foundelsewhere,public sector employeeshave more years of schooling
than their private sector counterparts, and also a lower rate of return on their schooling
investments (Psacharopoulos,1983).
2/ For a more detailedanalysisof the male-femaleearningsdifferentialsusingthe samesamplesand

selectivitycorrection,see Psacharopoulos
and Tzannatos(1992a)and (1992b).
- 12 -
Table 2. Mean Earnings, Years of Schooling and Mincerian Returns to Education:

by Gender, circa 1989
Country
Year
Earnings
(ocal curr.)
Males
Females
Years of
Schooling
Rate of Return
(percent)
Males Females
Males Females
Argentina
1989
8,563
5,629
8.7
9.8
10.7
11.2
Bolivia
1989
402
270
9.5
11.5
7.3
7.7
Brazil
1989
7,151
6,640
5.0
5.9
15.4
.14.2
Chile
1989
43,878
31,373
8.2
9.4
12.1
13.2
Colombia
1989
60,592
43,124
8.1
8.3
14.5
12.9
Costa Rica
1989
17,283
13,928
6.4
8.1
10.5
13.5
Dominican Republic
1989
722
522
8.4
9.5
7.8
12.0
Ecuador
1987
32,049
19,360
9.7
9.5
9.8
11.5
El Salvador
1990
988
766
7.0
6.7
9.6
9.8
Guatemala
1989
256
207
4.0
4.8
14.2
16.3
Honduras
1989
488
384
6.1
7.1
17.2
19.8
Jamaica
1989
9,829
1,047
7.0
7.4
28.0
31.7
Mexico
1984
84,520
71,533
6.3
7.5
14.1
15.0
Panama
1989
312
258
8.6
10.1
12.6
17.1
Paraguay
1990 290,496
165,787
9.1
8.9
10.3
12.1
Peru
1990
11,482
6,937
10.2
9.8
8.5
6.5
Uruguay
1989
178,086
97,865
8.7
9.3
9.0
10.6
Venezuela
1989
7,858
6,067
7.9
10.2
8.4
8.0
Source:Annex3.
13 -
Table 3. Mean Earnings, Years of Schoolingand Mincerian Returns to Education:

by EmploymentSector, circa 1989
Country
Year
Earnings
Years of Schooling
(localcurr.)
Rate of Return
(percent)
Private
Public
Private
Public
Private
Public
Argentina
1989
7,155
8,463
8.5
11.C
11.1
8.9
Bolivia
1989
361
369
8.7
11.7
8.7
6.7
Brazil
1989
9,979
7,746
4.1
8.2
15.0
11.4
Chile
1989
38,232
58,044
8.1
12.3
11.4
11.2
Colombia
1989
50,279
80,116
7.8
11.2
13.7
11.9
Costa Rica
1989
14,245
26,079
6.2
10.1
9.3
8.5
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Ecuador
1987
26,254
32,258
8.9
12.8
11.3
7.1
El Salvador
1990
835
1,215
6.1
10.9
9.4
6.2
Guatemala
1989
219
455
3.7
9.1
14.1
8.7
Honduras
1989
406
714
5.9
9.9
17.4
12.3
Jamaica
1989
6,443
3,140
6.9
8.5
24.9
16.0
Mexico
1984
73,448
108,503
5.7
9.7
15.4
8.0
Panama
1989
232
434
8.2
11.5
12.2
11.0
Paraguay
1990
,236,360
264,629
8.6
12.6
11.9
8.3
Peru
1990
8,002
10,295
9.6
12.5
9.0
9.0
Uruguay
1989
146,073
145,069
8.6
10.2
10.5
5.7
Venezuela
1989
6,700
7,037
7.3
10.5
9.7
Source: Annex3
n.a. = not available
6.6
- 14 -
B. OvertimeChangesin Relative Earnings

Before we turnto the discussionof the time trends of the rate of return to schooling, let
us examine the behavior of earnings differentialsin Latin American countries. Owing to the
availability of data, calculation of earnings differentialsover time is only allowed for twelve
countries. Table 4 presents the earnings differentialsin absolute and index values by level of
education, and Table 5 provides the corresponding structure of the labor force by level of
education.
N.
As seen in Table 4 and depicted in Figure 2, the relative earnings of individualswith

either secondaryor universityeducationdecreasedover time in most conntrieswith the exception
of Bolivia, Guatemala and Panama. This is expected since the number of workers as a
percentage of the labor force with post-compulsoryschooling increased during the same time
period in all countriesexpect Hondurasl'. This implies a strong relationship between schooling
and income distributionin society. Earnings differentialsnarrow as the educationalattaintment
of the labor force increases.
I/ The overtimecomparability
of theHonduras,PeruandUruguaydatasets is limitedgiventhe factthe
later surveysrefer only to urban areas.
15-
Table 4. Over Time Earnings Differentials by Educational Level

EarningsOocalcurr.)
Country
EducationalLevel
(Early-Late)
Index(Prim.=100)
Early
Late
Early
Late
n.a.
511
615
976
2,381
2,724
4,099
4,843
7,757
13,231
n.a.
83
100
159
387
56
85
100
160
272,
Argentina
1980-89
No Education
Lessthan Primary
Primary
Secondary
University
Bolivia
1986-89
No Education
Primary
Secondary
University
134,311
208,855
235,632
463,970
268
281
363
795
64
100
113
222
95
100
129
283
Brazil
1979-89
No Education
Primary
Secondary
University
7,399
10,791
17,398
39,934
5,257
7,145
8,772
17,658
69
100
161
370
74
100
123
247
Colombia
1980-89
No Education
Primary
Secondary
University
3,690
5,643
12,719
31,413
24,004
36,769
57,529
145,487
65
100
225
557
65
100
156
396
CostaRica
1981-89
No Education
Primary
Secondary
University
1,256
1,437
2,763
5,043
10,389
13,222
20,956
42,323
87
100
192
351
79
100
158
320
Guatemala
1986-89
No Education
Primary
Secondary
University
92
192
354
762
134
246
444
1,096
48
100
184
397
54
100'
180
446
180
269
307
647
1,667
n.a.
263
363
700
1,853
59
88
100
211
543
n.a.
72
100
193
510
Honduras
1986-89
No Education
Lessthan Primary
Primary
Secondary
University
Continued
-
- 16Table4 cont'd.
Country
(Early-Late)
EducationalLevel
Panama
1979-89
No Education
Primary
Secondary
University
Paraguay
1983-90
Less than Primary*

Primary
Secondary
University
Peru
1985-90
Earnings (local curr.)

Early
Late
Index
Early
---Late
115
164
279
592
167
180
335
750
70
100
170
361
93
100
186
417
26,290
30,064
55,837
112,866
145,371
177,895
282,777
599,067
87
100
186
375
82
100
159
337
No Education
Primary
Secondary
University
2,661
7,493
10,432
27,463
6,593
7,431
9,014
22,778
36
100
139
367
89
100
121307
Uruguay
1981-89
No Education
Primary
Secondary
University
2,132
3,646
5,278
8,157
68,495
132,583
171,160
263,405
58
100
145
224
52
100
129
199
Venezuela
1981-89
No Education
Less than Primary
Primary
Secondary
University
n.a.
1,940
2,321
3,367
6,138
3,778
4,869
5,983
8,013
13,802
n.a.
84
100
145
264
63
81
100
134
231
Source:Annex3.
Notes: n.a. = not available.
* Due to the sample size, individualswith no educationor less-than-primaryeducationare
grouped into less-than-primaryeducation.
17-
Figurie2. Time Trend of Earnings Differentialsby Level of Education In Four Countries
OLug
fmMmP
a imiverity
400,
a Sftm
o No
*t1a
Sw
a LrlvmsIty
~~~~~~~~~~~~~~~~~400
200.
200
jjo
-j0
~~~~~~~~~~~~~~~~~~~0
0
lgho
Yh
19gh
Cduobb4It"
NomE*gatla
YW
V-u=t,
a S,ec
OLm ThenPtiwy
IN49
9Sm1cn'y
0 UseoIYUdvet
I00~~~~~~~~~~~~~~~~~~0
400Soo
200
200,
1
_
Wb
_
010
*,
0toh
jg
- 18 -
Table S. Over Time Educational Attainment of the Labor Force

Attainment(X)
Country
(Early-Late)
EducationalLevel
Argentina
1980-89
No Education
Less than Primary
Primary
Secondary
University
Bolivia
1986-89
No Education
Primary
Secondary
University
Index
Early
Late
Early
Late
n.a.
19.9
36.1
11.6
3.7
1.4
13.6
321
14.0
6.8
n.a.
55
100
32
10
4
42
100
44
21
4.9
4.7
8.9
2.1
5.4
17.9
10.5
104
100
577
189
39
100
331
194
27.1
Brazil
1979-89
No Education
Primary
Secondary
University
19.2
9.5
9.4
4.1
22.7
7.7
12.4
6.3
202
100
99
43
295
100
161
82
Colombia
1980-89
No Education
Primary
Secondary
University
4.2
20.9
10.2
5.6
2.4
19.3
19.5
9.2
20
100
49
27
12
100
101
48
Costa Rica
1981-89
No Education
Primary
Secondary
University
6.0
32.4
9.9
3.7
5.5
34.7
12.2
5.0
19
100
31
11
16
100
35
14
Guatemala
1986-89
No Education
Primary
Secondary
University
30.3
15.6
7.9
2.0
31.0
15.5
6.1
2.4
194
100
51
13
200'
100
39
15
Honduras
1986-89
No Education
Less than Primary
Primary
Secondary
University
11.9
26.4
22.9
19.1
4.8
n.a.
41.1
28.1
14.8
4.1
52
115
100
83
21
n.a.
146
100
53
15
Continued
19-
Table5 cont'd.
Attainment(%)
Country
Educational Level
(Early-Late)
Index
Early
Late
Early
Late
Panama
1979-89
No Education
Primary
Secondary
University
4.0
28.1
18.4
5.8
3.4
25.2
21.1
9.2
14
100
65
21
13
100
84
37
Paraguay
1983-90
Less than Primary*

Primary
Secondary
University
23.9
27.9
14.9
5.9
15.0
25.3
23.5
6.4
86
100
53
21
59
100
93
25
Peru
1985-90
No Education
Primary
Secondary
University
11.1
17.1
32.4
5.6
19.4
20.2
36.2
10.0
65
100
189
33
96
100
179
50
Uruguay
1981-89
No Education
Primary
Secondary
University
1.6
30.2
4.7
8.3
0.9
51.6
13.0
5.7
5
100
16
27
2
100
25
11
Venezuela
1981-89
No Education
Less than Primary
Primary
Secondary
University
n.a.
22.0
32.8
9.2
4.1
2.8
8.8
25.6
10.0
13.1
n.a.
67
100
28
13
11
34
100
39
51
Notes: n.a. = not available.

* Due to the sample size, individualswith no educationor less-dhan-primary
educationare
grouped into less-than-primaryeducation.
-20C. Overtime Returns to Education

Among the eighteenLatin Americacountries, eight countrydata sets allow us to examine
the change in returns to education over the past decade and of comparing the results shown in
Table 6 to those in Table 1. There exists a slight declining trend in the returns to education,
while the ten year difference in the returns to education in Argentina and Panama is only
marginal. (See also Psacharopoulos(1987), Psacharopoulosand Velez (1988) and Riveros
(1990), on the experiencesof other countries).
The behavior of rates of return to schooling by gender over time demonstrates an

interestingpattern (Table 7). In the earlier period females did not have such a clear advantage
over men in the returns they realized on their schoolinginvestment;while in the early eighties,
only three out of the eight countriesshow that the average rate of return to males is greater than
their female counterparts.
- 21-
Table 6. Mean Earnings, Years of Schoolng and Mincerian Returns to Education:

Entire Sample, chrca 1980
Country
Year
Earnings
local curr.)
Years of
Schooling
Rate of
Return (m)
Argentina
1980
735,000
7.9
9.3
Brazil
1979
10,244
5.3
11.4
Colombia
1980
8,401
6.9
18.6
Costa Rica
1981
1,925
6.7
16.8
Panama
1979
231
8.5
13.0
Paraguay
1983
42,203
8.2
11.6
Uruguay
1981
4,375
8.5
10.3
Venezuela
1981
2,619
7.3
11.8
Source:Annex3.
-22-
:ble7. Mean Earings, Yem of Schoolingand Mincerian Returns to Education:

by Gender, circa 1980
Country
Year
Earnings(ocal curr.)
Males
Argentina
1980
Brazil
1979
10,943
Colombia
1980
CostaRica
Females
Males
Females
Rateof Return(%)
Males
Females
8.1
7.8
8.0
9.8
6,813
5.2
5.5
11.8
8.9
10,124
5,626
7.0
6.8
18.6
17.3
1981
1,539
3,334
5.9
9.5
14.8
10.4
Panama
1979
193
281
7.3
10.0
13.4
10.5
Paraguay
1983
51,043
28,678
8.4
7.7
10.5
11.7
Uruguay
1981
4,549
4,318
9.9
8.0
7.3
10.5
Venezuela
1981
2,545
2,799
6.7
8.7
12.1
10.9
Source:Annex3.
1,234Q9O0 333,000
Yearsof Schooling
23 -
Unlikepreviousresearchi',the resultsof the presentstudy for the time trend in rate of

return to educationby genderis mixed. Althoughthe overallaverageschoolingfor both males
and femalesincreasedover time, the figurespresentedin Table 7 stronglysupportan obvious
decliningtrend in the averagerate of return for males,but not in the case of females. In five
out of the eightcountriesstudied,an increaseovertimein averageyearsof schoolingof females
is associatedwitha higherrate of return. Thisinterestingresultimpliesthat the "race"between
technologyand educationis morerelevantin the case of malesthan their femalecounterparts.
Therelativelyhighereducationalattainmentof publicemployeeshasnot changedduring

the past decade(Table 8). The behaviorof the averagerate of return, however,has changed
during the 1980s. In early 1980s, the averagerates of return for the public employeesin
Argentina,CostaRica, Panama,Uruguayand Venezuelawere higherthanthose of individuals
whoworkedin the privatesector. Towardstheend of thedecade,theoppositeis observed.This
may be due to the economiccrisis and fiscalconstraintsduringthe period.
g/ SeePsacharopoulos
(1987),Psacharopoulos
andSteier(1988),andRiveros(1990).
-24
Table S. Mean Earnings, Years of Schooling and Mincerlan Returns to Education:

by Sector of Employment, circa 1980
Country
Year
Years of Schooling
Rate of Return (%)
Private
Public
Private
Private
Public
Public
Argentina
1980
657,000
1,319,000
7.7
9.5
6.3
9.7
Colombia
1980
10,374
3,442
7.7
5.0
16.7
14.0
Costa Rica
1981
1,990
1,744
6.3
7.7
15.6
20.6
Panama
1979
250
198
7.8
9.6
12.3
15.7
Paraguay
1983
40,880
51,151
7.6
11.9
12.0
9.2
Uruguay
1981
5,331
2,748
8.3
8.7
9.1
11.9
Venezuela
1981
2,895
1,898
7.1
7.8
11.2
14.0
Source:Annex3.
- 25 -
D. Extended Earnings Functions

Table 9 reports the results of fitting the extended earnings functions in order to
disaggregatethe retums to educationby level of schooling. As shown in this table, all countries
except Chile, Costa Rica, Panama, Paraguay and Peru are found to have the highest rate of
return in primary education comparedto other educationallevels. This result is consistentwith
studiesby Psacharopoulos(1972, 1981, 1985a, 1988). Consequently,primary educationremains
the most profitable investmentin human capital, at least from the individualpoint of view.
26 -
Table 9. Mean Earings and Mincerlan Retums to Educatlon: by Level of Education

Country
Year
EarningsOocalcurr.)
NoEd.
Primary Secondary/
Gen-Voc
Argentina
1989
2,724
4,843
Bolivia
1989
268
281
Brazil
1989
5,257
Chile
1989
Colombia
Rateof Retum(%)
Univ.
Primary
Secondary/
Gen-Voc
Univ.
7,757
7,321"
7,915F
363
351w
398W
13,231
17.90
11.32
12.30(
10.98W
15.40
795
19.40
7.60
6.63W
10.43#
17.40
7,145
8,772
17,658
49.55
16.40
25.75
21,253
28,451
150,269
16.65
24,004
36,769
145,487
28.35
9.45
9.43w
13.08Wf
12.22
16.70
1989
48,309
48,165"
77,109k'
57,529
CostaRica
1989
10,389
13,222
20,956
20,89(0
21,365k
42,323
17.05
11.44
11.78W
12.25'
17.60
Dom.Rep.
1989
376
506
1,677
24.50
1987
12,931
18,725
64,584
27.25
10.78
10.83W
10.28W
11.37
13.98
Ecuador
668
669"
656k
30,101
El Salvador
1990
495
741
1,180
2,458
23.75
11.35
Guatemala
Honduras
1989
1989
134
263
246
363
444
700
693",
1,091W
1,096
1,853
46.55
23.30L'
15.02
19.94
19.80W
28.10Y
Jamaica
1989
301
4,285
6,604
7,473
23.45
38.27
Mexico
1984
18,613
54,558
100,393
173,304
101,402W
93,182k'
51.85
12.40
12.42"
12.33kv
12.95
Panama
1989
167
180
11.80
14.25
15.02w
9.86w
18.12
335
342"
274W
750
19.92
11.40
8.93
18.38
19.90
9.68
Continued-
27 Table9 cont'd.
Country
Year
Rate of Retun (%)
No Ed.
Primary
Secondary/
Gen-Voc
Univ.
Primary
Secondary/
Gen-Voc
Univ
10.801'
11.82
13.77
Paraguay
1990
145,371
177,895
282,777
599,067
Peru
1990
6,593
7,431
9,014
9,013"
9,036
22,778
9.90
4.14
4.04p
6.362'
13.28
Uruguay
1989
68,495
132,583
171,160
263,405
173,317WV
168,486'
30.55
8.98
8.151'
10.15k
14.05
Venezuela
1989
3,778
5,983
17.55
9.66
8.9421
13.10(
8.12
8,013
7,672W
9,994'
13,802
Source: Annex4.
Notes: ' The rate of retum is with respectto less-than-primary
education.
Earningsfor individuals
of secondarygeneraleducation.
E
Eamingsfor individualsof secondaryvocationaleducation.
Rate of returnto secondary generl educationwith respectto pinmy education.
Rateof returnto secondaryvocationaleducationwith respectto primaryeducation.
SJ
J'
- 28 On the other hand, only three of the countriesdemonstrate a declining trend of rates of
return by level of education (El Salvador, Honduras and Venezuela). The "law of diminishing
returns" in investmentin human capital in Latin America is found wamting.
E. Secondary General versus Vocational Education

Ten of the data sets distinguish the type of secondaryeducation attended. It has been
argued that secondaryvocationaleducationprovides individualswith potentiallya better match
between skills acquired in school and the world of work. Previous studies have shown that
empirical evidenceon this issue is ambiguous5'.
We use both the earnings function and elaborate methods to estimate rates of return to
secondarygeneral or secondaryvocational education with respect to primary education. For
both methods, the results are very similar. Six out of the eleven countries show that the rate
of return to secondaryvocational education is higher than that of secondary general education
(Tables9 and 10). Moreover, in seven out of eleven countries, the private return to secondary
general education does not differ from that of secondary vocational education&'.The results
suggest that individualswho graduated from a vocationaltrack of the secondarylevel generally
have a relatively higher rate of return to their investmentin education.
S/ See Bellewand Moock(1990),Psacharopoulos

(1985a,1985b,1987),Psacharopoulos
and Velez
(1992),andVelezandPsacharopoulos
(1987).
f/ Ratesof returnto vocationaland generalsecondarygraduatesdo not differin DominicanRepublic
and Mexico.
-29 -
F. Private Returns to Education

We now use the full discounting method described earlier to compute more accurate
returns to education for each level and type of schooling. As shown in Table 10, among the
eighteencountries, in only about half of them does primary educationremain the mostprofitable
investmentby the end of the 1980s. The numberof countrieswhose rate of return to secondary
education with respect to primary education is the lowest is eight when the elaborate method is
adopted. This provides stronger evidence that higher education is worthwhileto attain from an
individualpoint of view. While El Salvador, Jamaica, Paraguay and Venezuelademonstrate a
declining trend of rates of return by educationallevel, rates of return at each successivelevel
increases the higher the level of education in Argentina, Chile and Honduras.
- 30 -
Table 10. Private Returns to Education by Level of Education: FuU Method (percent)
Country
Year
Primary
Secondary
All
General
University
Vocational
Argentina
1989
10.14
14.16
15.69
13.42
14.92
Bolivia
1989
9.84
8.12
7.08
8.51
16.42
Brazil
1989
36.61
5.13
n.a.
n.a.
28.17
Chile
1989
9.7
12.91
12.91
8.59
20.69
Colombia
1989
27.69
14.66
n.a.
n.a.
21.66
CostaRica
DominicanRep.
1989
1989
12.18
85.11
17.60
15.11
16.72
14.98
17.08
12.93
negative
19.43
Ecuador
1987
17.09
17.16
n.a.
n.a.
12.67
El Salvador
1990
18.90
14.51
n.a.
n.a.
9.50
Guatemala
1989
33.75
17.85
n.a.
n.a.
22.22
Honduras
1989
20.84"
23.29
22.08
26.78
25.94
Jamaica
1989
20.44
15.65
n.a.
n.a.
Mexico
1984
21.57
15.13
15.05
15.77
21.74
Panama
1989
5.71
21.03
21.02
32.55
20.99
Paraguay
1990
23.741'
14.64
n.a.
n.a.
13.73
Peru
1990
13.22
6.26
6.18
negative
39.65
Uruguay
1989
27.80
10.31
10.09
10.29
12.80
Venezuela
1989
36.32
14.58
14.13
15.38
10.96
n.a. = notavailable
Notes: 1'Therate of returnis with respectto less-than-primary
education.
n.a.
- 31 G. SocialReturns to Education
In order to provide insight on the issues of resource allocationamong different levels of
education we present the social rates of return by educationallevel. Given the availability of
information on unit costs of different levels of schooling, as shown in Table 11, we calculate
the social rates of return to education for fourteenLatin Americancountries using the elaborate
method discussedearlier.
From Table 12, it is obvious that social rates of return are lower than the private rates
of return presentedin Table 10 for the correspondingcountries. This is consistentwith previous
findings.Y In addition, in ten out of the fourteen countries the social rates of return to
investmentin primary educationis the highest. This result is consistentwith studiesby Fiszbein
and Psacharopoulos (1991), Gomez-Castellanosand Psacharopoulos (1990), Kugler and
Psacharopoulos(1989), Psacharopoulosand Velez (1992), and Riveros (1990). It also suggests
that investment in primary education is still the number one priority for most of the Latin
American countries.
With the lowest social rate of return to secondaryeducation,countries such as Argentina,

Bolivia, Brazil, Colombia, Mexico and Uruguay may have reached the equilibrium at this
particular level of education. As seen from the estimatesof social returns to both primary and
university education for these six countries, with the exception of Argentina, it is profitable to
7/ SeeGomez-Castellanos
andPsacharopoulos
(1990),Fiszbeinand Psacharopoulos
(1991),Kuglerand
Psacharopoulos
(1989),Psacharopoulos
(1981, 1985a, 1988),Psacharopoulos
and Velez (1992),and
Riveros(1990).
- 32 -
devote resourcesnot only to primaryeducation,but also to higher education. Results for

Argentina,Brazil,Chile Honduras,Mexicoand Uruguayindicatethat on efficiencygrounds,
investmentsin higherand primaryeducationare bothprofitableand thatexpansionof secondary
educationis an alternativefor Chile,CostaRicaand Honduras.
- 33 -
Table11.SocialDirectUnit Cost per Year by Levelof Education

Education
Level
Country/Year
Argentina
1989
Primary
Secondary
$US
142
310
Unit Cost/Year
LocalCurr. Index
18,759
41,157
100
219
- General
- Vocational
Bolivia
1990
577
76,603
408
Primary
Secondary
72
101
228
320
100
140
- General
Brazil
1989
Chile
1989
Primary
Secondary
- General
Statisticson the University
504
243
1598
689
701
100
434
3,174
5,911
1,231
8,996
16,752
179
1,306
2,431
System,"1992. Exchangerate
3.17.
Reportsfrom HumanResources
OperationsDivision,Country
DepartmentI, LatinAmerica
and CaribbeanRegionOffice,
WorldBank.Y1
48,280a
46,201'
100
96
Inflatedfrom 1987figu'res,
WorldBankestimatesby
169
192
45,090
51,200
McMeekin.
University
93
106
1,006
268,829
557
Primary
Secondary
80
191
44,080
95,860
100
217
Vocational
- General
- Vocational
University
CostaRica
1989
BoliviaCentralBank,Memoria
1990. UDAPE,"Basic
181
173
Colombia
1990
Inflatedfrom 1985figures.
Kuglerand Psacharopoulos
(1989).
University
- Vocational
University
Primary
Secondary
- General
- Vocational
Uk.versity
Source
Primary
Secondary
- General
- Vocational
University
Fundacionpara la Educacion
Superiory Desarrollo,
communicationto the World
Bank,August11, 1992.
1013
509,020
1155
144
11,750
100
222
423
1,541
18,133
34,476
125,614
154
293
1,069
Inflatedfrom 1986figuresin
1978constantprices. Cota
RicaPublicSectorExpenditure
Review,ReportNo. 7877-CR,
Latin Americaand the
CanbbeanRegionalOffice,The
WorldBank(1989).
Continued-
34 -
Table 11 cont'd.
UnitCost/Year
Education
Country/Year
Ecuador
1987
El Salvador
1990
Source
Index
Level
$US
Local Curr.
Primary
Secondary
- General
- Vocational
97
218
16,500
37,200
100
225
University
652
111,200
674
Primary
Secondary
- General
63
66
502
533
100
106
University
227
1,852
364
Primary
Secondary
- General
- Vocational
University
115
185
229
369
100
161
1,233
2,465
1,076
127
323
729
1,854
100
254
6,452
37,062
5,084
Gomez-Castellanosand
Psacharopoulos(1990).
FundacidnMiguelKast(1990).
- Vocational
Honduras
1989
Jamaica
1989
Primary
Secondary
- General
- Vocational
University
Deflatedfrom 1990figures.
HondurasSocialSector
Programsby W. McGreevey,
The World Bank, 1990.
Inflatedfrom 1987figures.y
Access.fralityand Efficiencyin
CaribbeanEducation:A
RegionalStudy. Populationand
HumanResourcesDivision,
CountryDept. Ell,Latin
Americanand Caribbean
RegionalOffice,The World
Bank, 1992.
Continued
-
35 Table11 cont'd.
Educational
Level
UnitCost/Year
USS
LocalCurr.
Index
135
589
22,663
98,846t
100
436
University
1,035
173,658
766
Primary
Secondary
50
144
61,623
176,259
100
286
710
256
872,685
154,900
1,416
100
119
Country/Year
Mexico
1984
Primary
Secondary
Source
Basedon SEP (1985),p.8.
- General
- Vocational
Paraguay
1990
- General
- Vocational
Uruguay
1989
University
Primary
Secondary
- General
306
185,100
450
272,200
176
University
614
371,500
240
Primary
Secondary
- General
198
347
315
7,668
13,420
12,170
100
175
159
471
18,198
237
1,625
62,795
819
Venezuela
1989
Vocational
- Vocational
University
PublicEx=
1ditue ReviewsThe
SocialS n, ReportNo.
10193-PA,The World Bank,
1992.
Psacharopoulos
and VElez
(1992).
Fiszbeinand Psacharopoulos
(1991).
Source:Annex1.
Notes: Y Primary educationunit cost comes from Public Sendina on SocialProsram=,whilesecondary educadon unit
costs come from SecondaryEducationand Trainina in Bmzil: Adaotin to New Economic Realiis. llhzr
Educaion Reform in Brazil provides the unit cost of higher education.Informationfor both pnmary and
secondary educationhas to be inflated to 1989 current prices.
Unit cost for nine years of primary education.
I Weightedaverage of academicand vocational tracks (4.5: I ratio, respectivelyfrom Unesco, Statisti
Xmuboic,1990)for 3 yearsof secondaryeducation.

FUnit cost refers to upper secondaryeducation.
- 36 -
TIble 12. Social Returns to Education by Level of Education: Full Method (percent)
Country
Year
Secondary
Primary
All
General
University
Vocational
Argentina
1989
8.44
7.06
n.a.
n.a.
7.55
Bolivia
1989
9.31
7.31
n.a.
n.a.
13.13
Brazil
1989
35.55
5.08"'
n.a.
n.a.
21.44
Chile
1989
8.05
11.10
11.13
7.23
13.96
Colombia
1989
20.04
11.36
n.a.
n.a.
14.03
Costa Rica
1989
11.16
14.43W
13.74
11.86
9.03
Ecuador
1987
14.71
12.73
n.a.
n.a.
9.87
El Salvador
1990
16.38
13.33
n.a.
n.a.
8.00
Honduras
1989
18.181
19.72
n.a.
n.a.
18.93
Jamaica
1989
17.73
7.92
n.a.
n.a.
n.a.
Mexico
1984
19.04
9.57
n.a.
n.a.
12.91
Paraguay
1990
20.30-'
12.74
n.a.
n.a.
10.84
Uruguay
1989
21.61
8.05"'
8.16
7.08
10.29
Venezuela
1989
23.41
10.18
9.99
10.42
6.16
n.a. = not available.

Notes: LI Same cost as secondarygeneral education.
1' The rate of return is with respectto less-than-primaryeducation.
- 37 -
As suggested by Psacharopoulos(1988), results of vocationalizationmay not always

match expectations. The estimates of social rates of return to general versus vocational
secondaryeducation shown in Table 12 demonstratemixed results. Given the limitationof the
data and the limited availabilityof unit cost estimates, the present study is not able to provide
any conclusiveargument on this issue.
By comparing the private and social rates of return by level of education,one can address
the extent of public subsidizationof education. Table 13 presents the index of subsidizationof
educationby level, showing that in nearly all countriesuniversity educationis the most heavily
subsidizedlevel of schooling. This finding points to the regressive allocationof public finds -a finding common in the world today.
IV. Conclusion
In this paper we have adopteda macro, although consistent, approachto study earnings
differentials by level of education in 18 Latin American countries and used altemative
methodologiesto assess the private and social retums to investmentin each level of education.
The results document that primary educationis still the numberone investmentpriority in most
countries, and that the earnings premium of higher education graduateshas declined during the
eighties. Given the macro nature of our findings, these shouldbe used only as a starting point
for more detailed within-countrywork in order to assess education investmentpriorities in the
respectivecountry.
38-
Table 13. Index of Pubic Subsidization of Education by Level (percent)

Country
Year
Primary
Secondary
Higher
Argentina
1989
17
50
49
Bolivia
1989
10
20
Brazil
1989
30
Chile
1989
17
14
33
Colombia
1989
28
22
35
CostaRica
1989
18
30
Ecuador
1989
14
26
22
El Salvador
1989
13
16
Honduras
1989
13
17
27
Jamaica
1989
13
49
n.a.
Mexico
1989
12
37
41
Paraguay
1989
14
13
21
Uruguay
1989
22
22
20
Venezuela
1989
36
30
44
Source: Based on Tables 10 and 12.

- not available.
Note: The subsidizationindex is definedas the percent by whichthe private
rate of return exceeds the social rate.
n.a.
39 -
REFEENCES
Bellew, Rosemary and Peter Moock. 1990. "Vocational and Technical Education in Peru."
Economicsof EducationReview9(4):365-75.
Bourgouignon, F. 1980. "The Role of Education in the Urban Labour Market During the
Process of Development:The Case of Colombia." Paper presented at the VI World
Congress of the InternationalEconomicAssociation,Mexico, August 1980.
Gomez-Castellanos, Luisa and George Psacharopoulos. 1990. "Earnings and Education in
Ecuador: Evidence from the 1987 HouseholdSurvey." Economicsof EducationReiew
9(3):219-27.
Kugler, Bernardoand George Psacharopoulos.1989. "Earningsand Educationin Argentina: An
analysis of the 1985 BuenosAires HouseholdSurvey.' Economicsof Education
8(4):353-65.
Mincer, J. 1974. Schooling. Experienceand Earnings. New York: Columbia UniversityPress.
Fiszbein, Ariel and George Psacharopoulos. 1991. "A Cost Benefit Analysis of Educational
Investmentin Venezuela, 1989." Views from LATHR, Latin Americaand the Caribbean
Technical Department, The World Bank.
Psacharopoulos, George. 1972. "Rates of Return to Investment in Education Around the
World." ComparativeEducationReview 16(1):54-67.
Psacharopoulos,George and R. Layard, 1979. "HumanCapital and Earnings: British Evidence
and a Critique, "The Reviewof EconomicStudies, Vol. LVI, No. 3, July 1979; 485503.
Psacharopoulos,George. 1981. "Returnsto Education: An UpdatedInternationalComparison."

ComparativeEducationReview 17(3):321-41.
Psacharopoulos,George. 1983. "Educationand Private versus Public Sector Pay." IAour and
SggipU 8(2):123-34.
Psacharopoulos, George. 1985a. "Returns to Education: A Further International Update and

Implications." The Journal of Human Resources 20(4):583-604.
Psacharopoulos,George. 1985b. "An Evaluationof CurriculumDiversificationin Colombiaand
Tanzania." ComparativeEducationReview29(4):507-25.
- 40 Psacharopoulos, George. 1987. "Earnings and Education in Brazil: Evidence from the 1980
Census." Educationand Training Department,Research Division, The World Bank.
Psacharopoulos, George. 1988. "Educationand Development:A Review." The World Bank
Research Observer 3(l):99-116.
Psacharopoulos, George. 1989. "Time Trends of the Returns to Education: Cross-National
Evidence." Economicsof EducationReview 8(3):225-31.
Psacharopoulos, George and Francis Steier. 1988. "Education and the Labor Market in
Venezuela, 1975-84." Economicsof EducationReview 7(3):321-32.
Psacha,opoulos, George, Ana-Maria Arriagada and Eduardo Velez. 1992. "Earnings and
Education among Self-EmployedMales in Colombia." Bulletin of Latin American
Research2(l):69-89.
Psacharopoulos,George and Zafiris Tzannatos. 1992a.Women's Employmentand Pay in Latin
America: Overviewand Methodology.Washington,DC: The World Bank.
Psacharopoulos, George and Zafiris Tzannatos, eds. 1992b. Case Studies on Women's
Employmentand Pay in Latin America. Washington, DC: The World Bank.
Psacharopoulos, George and Eduardo Velez. 1992. "Education and the Labor Market in
Uruguay." Views from LATHR, I-atin America and the Caribbean Technical
Department, The World Bank.
Riveros, Luis A. 1990. "The EconomicReturn to Schoolingin Chile. An Analysis of its LongTerm Fluctuations."Economicsof EducationReview 9(2):111-21.
*
Schultz, T. W. 1961. "Investmentin Human Capital." American EconomicReview. March.

Tinbergen,Jan. 1975. Income Distribution:Analysisand Policies. Amsterdam:North-Holland.
Velez, Eduardo and George Psacharopoulos. 1987. "The External Efficiency of Diversified
SecondarySchools in Colombia." Economicsof EducationReview 6(2):99-110.
- 41 -
ANNEx1. SURVEYDATADuscrinoN
Country/Date
Survey Name
ExecutingAgenoy
Geographical
Coverage
Argentina
October 1980
Encuesta Permanente
de Hogares(EPH)
Instituto Nacionaldo
Estadisticay Censos
MetropolitanAra
3,400
Argentina
May 1989
EncuestaPermanent.
do Hogares (EPH)
Intituto Nacionalde
Estadisticay Censos
Metropotitan
Area
16,759
Bolivia
1986
EncuestsPermanent.
de Hogare (EPH)
Instituto Nacionalde
Estadistica(INS)
La Paz, Coohabamba,
Cruro, y Santa Cruz
12,226
Bolivia
November 1989
Encuesta Integrada
de Hogarp (EIH)
Instituto Nacional de
Estadistica(INE)
17 urban centers with

10,000 or mor
inhabitants
37,864
8razil
November 1979
Pesquisa Nacionalpor
Amostrade Domicilios
(PNAD)
Fundacao Istituto Brashiro

de Geografiay Estadistica
Naional
88,975
Brazil
Fourth quarter 1989
Pesquisa Nacional por

Amostrade Domicilios
(PNAD)
Fundacao Instituto Bnuieiro

de Geografia y Eatadistics
National
70,777
Chile
Fourth quarter 1989
Encuesta Nacionaldel
Empleo (PIDEH)
Instituto Nacionalde
Estadisticay Censos
National
32,456
Colombia
September 1980
Encuesta Nacional de
Hogares - Fuerza de
Trabajo (ENH)
Departamento
Administraivo Nacional
de Estadstica
Barranquilla,Bogota,
Bucaramanga,Call,
Manizales, Medellin y
pato
7,473
Colombia
September 1989
Encuesta Nacional de
Hogares - Fuerza de
Trabajo (ENH)
Deparumento
Administraivo Nacional
de Estadistica
Barranquilla,Bogota,
Bucaramanga,Ca}i,
Catagena, Manizales,
Medetlin y Pasto
17,949
Costa Rica
July 1981
EncuestaNacional de
Hogars- Empleoy
Desempleo (ENH)
Direccion General de
Estadisticay Censos
National
6,604
Costa Rica
July 1989
Encueta de Hogares
de Propositos
Muldples(EHPM)
Direecion General de
Estadisdca y Censos
National
7,637
Dom. Republic
March 1989
Encuesta de Gasto
Social de las Familias
Banco Central de la
Republica Dominicas
National
799
Ecuador
November 1987
Encuesta Peiodica
sobro Empleoy
Desempleo
Instituto Nacional
do Empleo
Nadonal
5,558
Number of
Households
Continued
-42ANNX
continued Goographical
Coverage
Numberof
Houscholds
Country/Date
SurveyName
Execouting
Agency
El Salvador
October1990
Encuestade Hogamos
de Proposizos
Multiples(EHPM)
Ministeriodo Planificacion
y Coordinacion
del
DesarroloEoonomico
y Social
Urban
Guatemala
Oct 1986-Aug1987
EncuestaNacional
Soci-Detmografica
(ENSD)
InstitutoNacionalde
Estadistica
National
9,660
Guatemala
Apr 4-July24, 1989
EncuestaNacional
Socio-Demografica
(ENSD)
InstitutoNacionaldo
Estadistica
National
10,934
Honduras
September1986
EncuestaContinua
SobreFucrza
do Trbajo (ECSFT)
DireccionGeneraldo
Estadsticay Censos
16 majorcities
8,650
Honduras
September1989
Encues Pormanente
do
Hogaresdo Propositos
Multipls (EPHPM)
DireccionGeneralde
Estadisticay Ccnsos
National
8,648
Jamaica
July 1989
JamlaicaSurveyof
LivingConditions
Statistidcal
htitute
of Jamaica
National
2,725
Mexico
Thirdquartwr1984
EncuestaNacionaldo
Ingreso- Gastode
los Hogarps(ENIGH)
Diroccionde Estadistica
de CortoPlaza
National
4,708
Panama
Sep 19-Oct28. 1979
Encuetado Hogares,
Manode Obra(EMO)
Direcocion
de EstAdistica
y Conso
National
8,593
P4nama
August1989
Encuestade Hogares,
Manode Obra(EMO)
Diroocionde Estadistica
y Censos
National
8,817
Parguay
June-August1983
Encuestado Hogaes,
Manode Obra(EMO)
Direcion Generalde
Estadistica
y Coms
Metropolitan
Area
1,002
Paraguay
June-August1990
Encuestad Hoepros,
ManedoObra (EMO)
DireccionGeneraldo
Estadisticay Censos
Metopoltan Ar
1,000
Peru
July 1985-July1986
PeruLSMS
InstitutoNacionalde
Estica
Informatica
National
4,981
Peru
June-July1990
Peru LSMS
InsdtutoCuanto
Lima
1,385
Uruguay
Secondhalf 1981
Encuest Nacionalde
Hogas (ENH)
DireccionGenerald
Estadisticay Caaos
Urban
9,506
23,773
Continued
-43
continued
Geogrphial
Covegp
Numberof
Households
Country/Date,
SurveyName
ExecudngAgoney
Uruguay
Secondhalf 1989
EncuestaNacionalde
Hogarm(NH)
DireccionGoneralde
Estadisticay Consos
Urban
21,473
Venezuela
Secondhalf 1981
Encuosta
do Hogares
por Muesta (EHM)
OficinaCentrl do
Estadisdcae Informatica
National
4S,421
Venezuela
Secondhalf 1989
Encuasado Hogares
por Muestra(EHM)
OficinaCental do
Estadisticae Informatica
Nadonal
61,385
- 44
ANNEX2. VARLABLE
DEFINIONS
All country data sets refer to individuals age 15 to 65, inclusive. Observations with
missing values for education variables have been dropped from the analysis. All individuals
have positive earnings from employment.
1. Education
The education variables are of two types. One is continuous in terms of years of
schooling (S). The other is a series of educationaldummy variables:
NOSCHOOL No education.
PRIMDROP
Primary education incomplete.
PRIM
Primary education completed.
SECDROP
Secondaryeducation, either general or vocational, incomplete
SECGEN
Secondarygeneral education completed. In cases where information on

the general/vocationalsplit of secondary education is not available, this
variable refers to both types of the curriculum.
SECVOC
Secondaryvocationaleducation completed.
SECTEAC
Teachers' college graduate.
NOUNI
Higher non-university education such as post-secondary education or

technicalinstitute.
UNIVDROP
Universityeducation incomplete.
UNIV
Universityeducation completed.
In the case of the Paraguay data sets (1983 and 1990), the sample size of those with noeducation (NOSCHOOL)is very small and hence we grouped this category with the less-thanprimary category ,PRIMDROP). In Peru's 1985and 1990 data sets, the two education groups
are defined in a different way:
NOSCHOOL No education or primary education incomplete.
PRIM
Primary education completedor secondaryeducation incomplete.
- 45 -
2. Eamings
The earningsvariableusedin the study is the sum of monthlywage earningsand selfemploymentincomein the primaryjob in localcurrencywitha fewexceptions.In the 1990El
Salvadordata, bonusearningsare included. Quarterlywageincomeis usedfor Mexicowhile
incomefrom the mainjob for the last weekis usedin the Peru 1985data set.
3. Hours Worked
Accordingto the over table informationin the countrydata sets, thereare three different
time periodsto whichthe hours workedvariablerefers to -- daily, weeklyor yearly. In the
1984Mexicodata set, the hoursworkedinformationis not available.
Daily
Daily hoursworkedin
primaryjob
Bolivia
Jamaica
1989
1989
Weekly
Total hours workedper week
Argentina 1980, 1989

Panama
1979
Venezuela 1981
Weeklyhoursworkedin
primaryjob
Bolivia
Brazil
CostaRica
Guatemala
Honduras
Panama
Paraguay
Uruguay
Total hoursworkedlast week
Dominican 1989
Republic
Ecuador
1987
El Salvador 1990
Peru
1990
1986
1979, 1989
1981, 1989
1986, 1989
1986
i989
1983, 1990
1981, 1989
Normalhoursworkedper week Chile

Colombia
Honduras
Venezuela
1989
1980, 1989
1989
1989
Yearly
Yearlyhoursworked
1985
Peru
-46-
4. Sectorof Employment
Most of the countrydata sets, exceptdata for the DominicanRepublic(1989),provide
informationon the sector of employmentfor each individual. Each samplewas split into
"public"and "private"sub-samplesusingthe followingrule:
PUBLIC
Publicsectoremployees.
PRIVATE Privatesectoremployees,self-employed
individuals,employersand family
workers.
Of course we had to adapt the above general rule dependingon the availabilityof
informationin the respectivecountrysurveys:
Argentina 1980, 1989
PUBLIC
Industryof naturalgas and petroleum,manufacturingindustryrelated to
petroleumand minerals,electricity,gas and water supplyindustry,water
and aerialtransportationindustry,communication
industry,socialservices,
publicand defenseadministration,and drainageservices.
PRIVATE Manufacturing
industrynot relatedto petroleumrefining,rubber, mineral,
machineryand equipments,constructionindustry,commercialand services
industries,groundtransporationindustry,financeand real estate,cleaning
and laundryservices.
Bolivia 1986, 1989
PUBLIC
Publicadministrationand publicemployeesor mixed.
PRIVATE Employeesof privatesectorand cooperative.

Brazil 1989
PUBLIC
Socialservicesand publicadministration.
PRIVATE Self-employed.
Mexico1984
PUBLIC
Industriesof oil, electricityand naturalgas, publicadministration,

education
and research.
PRIVATE Industriesof foodprocessing,textile,furniture,printing,chemicalindustry,

mineral, metal and machineryindustry, manufacturingand construction
industries,wholesalesandretail,hotelindustry,transportation
industry,real
estateand services.
- 47 -
Peru 1985
PUBLIC
PRIVATE
Wage earners.
Self-employed.
-48ANNE[Xa BASICEARNINGsFUNCIONS
Argentina 1980
Gender
Sector
Variable
Entire
Sample
Males
Females
Private
Public
Years of Schooling(S)
0.093
0.080
0.098
0.078
0.097
Experience (EX)
0.030
0.087
0.017
0.026
0.050
-0.0004
-0.0004
-0.0002
-0.0004
-0.0007
Log Hours (H) Worked
2.278
1.584
2.228
0.642
0.614
Constant Term
-3.191
-0.942
-3.096
3.231
3.056
R2
0.66
0.45
0.65
0.06
0.19w
6,156
2,745
3,411
2,030
-737
Earnings (Y)
735
1,234
333
1,207
1,309
7.9
8.1
7.8
7.9
9.5
EX
22
21
23
22
.21
31
43
22
47
40
3.621
2.554
2.673
1.543
1.024
Experience-squared(EX2 )
Means|
Var (Ln Y)
Source: EncuestaPermanentede Hogares (EPH), CEPAL
Notes: The earningsvariable(Y) is in thousandsof pesosper month.

H is the weeklyhoursworked.
All coefficientsare statisticallysignificantat the 5% levelor better.
-49 ANNEx3. BASICEARNINGsFUNeCoNs

Argentina 1989
Sector
Gender
Entire
Sample
Males
Females
Private
Public
0.103
0.107
0.112
0.010
0.089
Experience (EX)
0.045
0.052
0.039
0.046
0.048
-0.0006
-0.0007
-0.0006
-0.0007
-0.0007
0.613
0.355
0.590
0.38t
0.647
ConstantTerm
4.856
5.843
4.719
5.767
4.847
R2
0.35
0.32
0.40
0.26
0.35
4,760
2,965
1,795
2,463
1,097
7,456
8,563
5,629
7,413
8,463.
9.1
8.7
9.8
8.7
11.0
EX
22
23
21
22
21
42
46
36
45
39
0.656
0.546
0.696
0.557
0.610
Variable
Experience-squared(EX2)
Mens
Earnings (Y)
Var (Ln Y)
Source:EncuestaPermanentede Hogares(EPH),CEPAL.
Notes: The earningsvariable(Y) is in australesper month.
Allcoefficientsare statisticallysignificantat the 5% levelor better.
-50 FuNcrIoNs
ANIx 3L BASc EARNINGS
BoUvia 1989
Sector
Gender
Variable
Entire
Sample
Males
Females
Private
Public
0.071
0.073
0.077
0.087
0.06i
Experience (EX)
0.040
0.046
0.028
0.053
0.032
-0.0005
-0.0006
-0.0004
-0.0007
-0.0003
0.514
0.301
0.594
0.234
0.726
Constant Term
3.278
3.726
2.994
3.656
2.919
R2
0.17
0.18
0.18
0.19
0.19
5,356
3,823
1,533
2,989
2,367
Earnings (Y)
364
402
270
361
369
10.1
9.5
11.5
8.7
11.7
EX
18
19
16
17
20
8.2
8.7
7.1
8.7
7.6
0.645
0.659
0.539
0.697
0.573
Mans
Var (Ln Y)
Source: EncuestaIntegradade Hogares (EIH), CEPAL.
Notes: The earningsvariable(Y) is in bolivianosper month.

H is the dailyhoursworked.
-51
ANNEx3.L BASC EARNIGS FuNCIONS

Brazil 1979
Sector
Gender
Variable
Entire
Sample
Males
Females
Private
Public
0.114
0.118
0.089
n.a.
n.a.
Experience (EX)
0.071
OD70
0.053
n.a.
n.a.
-0.0011
-0.0011
-0.0009
n.a.
n.a.
-0.174
-0.270
-0.301
n.a.
n.a.
Constant Term
8.066
8.510
8.605
n.a.
n.a.
R2
0.34
0.37
0.28
n.a.
n.a.
6,655
5,529
1,126
n.a.
n.a.
10,244
10,943
6,813
n.a.
n.a.
5.3
5.2
5.5
n.a.
n.a.
EX
21
21
18
n.a.
n.a.
52
53
47
n.a.
n.a.
0.651
0.632
0.578
n.a.
n.a.
Means
Earnings (Y)
Var (Ln Y)
Source:PesquisaNacionalpor Amostrade Domicillos.

Notes: The earningsvariable(Y)is in cruzeirosper month.
n.a. = Not available.
-52 -
ANEX 3
BASICEARNIGS FUNWCIONS
Brazil 1989
Gender
Sector
Variable
Entire
Sample
Males
Females
Private
Public
Years of Schooling (S)
0.147
0.154
0.142
0.150
0.114
Experience (EX)
0.064
0.073
0.051
0.038
0.054
-0.0009
-0.0010
-0.0008
-0.0005
-0.0008
0.724
0.310
0.595
0.936
0.829
Constant Term
1.954
3.567
2.314
1.454
1.915
R2
0.29
0.30
0.29
0.26
0.26
108,527
69,773
38,754
24,690
17,428
6,969
7,151
6,640
9,979
7,746
5.3
5.0
5.9
4.1
8.2
EX
21
22
20
28
20
43
46
39
43
36
1.631
1.474
1.680
2.051
1.608
Experience-squared (EX2 )
MeanS
Earnings (Y)
Var (Ln Y)
Source: PesquisaNacionalpor Amostrade Domicillos, CEPAL.

Notes: The earnings variable (Y) is in nuevos cruzadosper month.
H is the weeklyhours worked.
All coefficientsare statisticallysignificantat the 5% level or better.
-53 -
ANNx 3. BASICEARNNGSFUNCTIONS
ChIle 1989
Sector
Gender
Variable
Entire
Sample
Males
Females
Private
Public
0.120
0.121
0.132
0.114
0.112
Experience (EX)
0.042
0.048
0.029
0.041
0.029
-0.0004
-0.0005
-0.0002
-0.0004
-0.0002
0.885
0.768
0.753
0.918
0.660
Constant Term
5.189
5.652
5.487
5.104
6.418
R2
0.40
0.39
0.45
0.37
0.29
37,679
26,823
10,856
33,794
3,885
40,275
43,878
31,373
38,232
58,044
8.5
8.2
9.4
8.1
12.3
EX
21
22
20
22
20
47
48
44
48
43
0.638
0.591
0.692
0.629
0.423
Experience-squared
(EX 2 )
Means
Earnings (Y)
Var (Ln Y)
Source: ProgramaIntegradode Encuestasde Hogares (PIDEH)

Encuesta Nacionaldel Empleo, IV Trimestre,1989
Notes: The earningsvariable (Y) is in pesos per month.
-54
AN
3. BASICEARNNGSFUNCTONS
Colombia 1980
Sector
Gender
Entire
Sample
Males
Females
Private
Public
0.186
0.186
0.173
0.167
0.140
Experience (EX)
0.066
0.081
0.042
0.060
0.060
-0.0008
-0.0010
-0.0005
-0.0008
-0.0009
0.584
0.395
0.577
0.690
0.434
Constant Term
4.020
4.668
4.299
4.000
4.665
1R2
0.34
0.33
0.35
0.35
0.10
11,373
7,017
4,356
8,136
3,237
8,401
10,124
5,626
10,374
3,442
6.9
7.0
6.8
7.7
5.0
EX
20
21
18
21
17
48
50
46
47
51
1.479
1.610
1.169
1.295
1.225
Variable
N
Means
Eamings (Y)
Var (Ln Y)
Source: EncuestaNacionalde Hogares, CEPAL.
Notes: The eamingsvariable(Y) is in pesosper month.

-55
ANwx 3.1 BAsic EARNiNGSFuCTIONS

Colombia 1989
Gender
Sector
Entire
Sample
Males
Females
Private
Public
0.140
0.145
0.129
0.137
0.119
Experience(EX)
0.047
0.059
0.035
0.046
0.035
-0.0005
-0.0006
-0.0004
0.645
0.428
0.719
0.664
0.326
ConstantTerm
6.190
6.897
6.108
6.140
7.980
R2
0.33
0.32
0.36
0.30
0.38
27,021
16,272
10,749
23,974
3,047
53,643
60,592
43,124
50,279
80,116
8.2
8.1
8.3
7.8
11.2
EX
20
21
18
19
20
48
50
46
48
45
0.947
1.010
0.815
0.956
0.458
Variable
-. OOOS -0.0003
MM
Earnings (Y)
Var (Ln Y)
Source: EncuestaNacionalde Hogares, CEPAL.

Notes: The earningsvariable (Y) is in pesos per month.
56 -
ANNEX
I BASICEARNINGSFUNCIONS
Costa Rica 1981
Gender
Sector
Variable
Entire
Sample
Males
Females
Private
Public
0.168
0.156
0.206
0.148
0.104
Experience (EX)
0.095
0.101
0.083
0.099
0.039
-0.0011
-0.0012
-0.0011
-0.0012
-0.0005
0.698
0.695
0.598
0.699
0.584
Constant Term
2.164
2.236
2.257
2.148
4.260
R2
0.44
0.44
0.51
0.38
0.37
8,220
6,033
2,187
6,454
1,766
1,925
1,990
1,744
1,539
3,334
6.7
6.3
7.7
5.9
9.5
EX
20
21
17
20
19
46
47
43
46
45
1.100
1.055
1.195
1.057
0.362
Means
Earnings (Y)
Var (Ln Y)
Source:EncuestaNacionalde Hogares(ENA),Empleoy Desempleo.CEPAL.

Notes: The earningsvariable(Y) is in colonesper month.
-57 ANNEX3 BAC EARNNGSFUNCTONS

Costa Rica 1989
Gender
Sector
Variable
Entire
Sample
Males
Females
Private
Public
0.109
0.105
0.135
0.093
0.085
Experience (EX)
0.039
0.042
0.033
0.035
0.030
-0.0005
-0.0005
-0.0004
-0.0004
-0.0003
0.745
0.620
0.725
0.747
0.393
Constant Term
5.345
5.896
5.064
5.443
7.248
R2
0.41
0.35
0.54
0.36
0.33
8,882
6,400
2,482
7,305
1,577
16,346
17,283
13,928
14,245
26,079
6.9
6.4
8.1
6.2
10.1
EX
21
22
18
21
19
45
47
41
45
45
0.692
0.576
0.922
0.677
0.268
Means
Earnings (Y)
Var (Ln Y)
Source: EncuestaNacionalde Hogares (ENH)Empleoy Desempleo, CEPAL.

-58
ANEX 3. BASICEARNIGS FUNCTIONS

Dominican Republic 1989
Gender
Variable
Sector
Entire
Sample
Males
Females
Private
Public
0.094
0.078
0.120
n.a.
n.a.
Experience (EX)
0.045
0.055
0 032
n.a.
n.a.
-0.0005
-0.0008
-0.0004
n.a.
n.a.
0.338
0.331
0.261
n.a.
n.a.
Constant Term
3.578
3.801
3.558
n.a.
n.a.
R2
0.30
0.30
0.39
n.a.
n.a.
736
436
300
n.a.
n.a.
Earnings (Y)
652
722
552
n.a.
n.a.
8.8
8.4
9.5
n.a.
n.a.
EX
17
19
15
n.a.
n.a.
46
47
45
n.a.
n.a.
0.573
0.479
0.659
n.a.
n.a.
Var (Ln Y)
Source:EncuestaNacionalde GastoSocial de las Famiias.

Notes: The earningsvariable(Y)is in sucresper month.
n.a. - Not Available.
- 59 -
3. BASICEARNINGSFuNcToNS
Ecuador 1987
Gender
Sector
Variable
Entire
Sample
Males
Females
Private
Public
0.108
0.098
0.115
0.113
0.071
Experience (EX)
0.048
0.054
0.037
0.051
0.030
-0.0007
-0.0008
-0.0005
-0.0007
-0.0004
Log Hours (H; Worked
0.376
0.273
0.305
0.391
0.206
Constant Term
6.864
7.434
6.938
6.730
8.234
R2
0.39
0.40
0.40
0.37
0.33
8,941
5,604
3,337
7,364
1,577
27,313
32,049
19,360
26,254
32,258
9.6
9.7
9.5
8.9
12.8
EX
19
19
18
20
18,
43
45
40
43
40
0.634
0.531
0.646
0.679
0.242
Means
Eamings (Y)
Var (Ln Y)
Source: EncuestaPeriodica Sobre Empleoy Desempleo en el Area Urbanadel Ecuador.
Notes: Quito,Cuenca,and Guayaquilonly.

The earningsvariable(Y) is in sucresper month.
- 60 ANNEx3. BASICEARNiNGS
FuNCTIoNs
El Salvador 1990
Gender
Variable
Sector
Entire
Sample
Males
Females
Private
Public
0.097
0.096
0.098
0.094
0.062
Experience (EX)
0.037
0.041
0.034
0.038
0.015
-0.0005
-0.0005
-0.0004
-0.0005
-0.0007*
0.556
0.499
0.561
0.595
0.319
ConstantTerm
3.239
3.513
3.132
3.083
4.887
R2
0.33
0.32
0.35
0.30
0.29
6,903
4,094
2,809
5,785
1,009
Earnings (Y)
899
989
766
835
1,215
6.9
7.0
6.7
6.1
10.9
EX
22
22
23
23
20
47
47
46
48
41
0.656
0.619
0.669
0.677
0.224
Means
Var (Ln Y)
Source: Encuestade Hogares de PropositosMultiples.

H is the weeldyhours worked.
All coefficientsare statisticallysignificantat the 5% level or better, except those with a *.
-61
ANNEx3. BASIC EARNINGSFUNCTIONS

Guatemala 1989
Gender
Sector
Variable
Entire
Sample
Males
Females
Private
Public
0.149
0.142
0.163
0.141
0.087
Experience (EX)
0.043
0.044
0.041
0.041
0.025
-0.0006
-0.0006
-0.0006
-0.0006
-0.0002
0.514
0.313
0.467
0.556
0.153
Constant Term
1.822
2.698
1.750
1.692
4.252
R2
0.35
0.29
0.50
0.29
0.39
11,708
8,476
3,232
10,554
1,154
Earnings (Y)
242
256
207
219
455
4.3
4.0
4.8
3.7
9.1
EX
23
24
21
24
20
47
48
43
47
42
1.044
0.996
1.103
1.002
0.304
Means
Var (Ln Y)
Source:Encuesta NacionalSocto-Demografica(ENSO), CEPAL.

Notes: The earningsvariable (Y) is in quetzalesper month.
-62 -
A,rx
3.
BASICEARNINGSFUNCTIONS
Honduras 1989
Gender
Variable
Sector
Entire
Sample
Males
Females
Private
Public
0.176
0.172
0.198
0.174
0.123
Experience (EX)
0.054
0.058
0.049
0.055
0.035
-0.0006
-0.0007
-0.0006
-0.0007
-0.0004
0.474
0.260
0.475
0.505
0.185
Constant Term
1.913
2.856
1.548
1.763
3.956
R2
0.43
0.42
0.51
0.37
0.49
9,945
6,575
3,370
8,442
1,503
Eanings (Y)
453
488
384
406
714
6.5
6.1
7.1
5.9
9.9
EX
20
20
18
20
19
47
48
46
48
43
0.990
0.937
1.042
0.964
0.428
Experience-squared(EX 2 )
Means
Var (Ln Y)
Source:EncuestaPenranentede Hogaresde PropositosMultiples(EPHPM),CEPAL.

Notes: The earningsvariable(Y) is in lempirasper month.
-63ANNEx 3. BAsc EARNIGS FUNCTIoNs
Jamaica 1989
Sector
Gender
Variable
Entire
Sample
Males
Females
Private
Public
0.288
0.280
0.317
0.249
0.160
Experience (EX)
0.052
0.083
0.039
0.041
0.018*
-0.0008
-0.0011
-0.0007
0.834
0.135*
0.781
0.767
1.834
ConstantTerm
1.638
2.760
1.445
1.980
2.432
R2
0.21
0.22
0.28
0.15
0.18
2,127
1,172
955
1,768
359
5,886
9,829
1,047
6,443
3,140
7.2
7.0
7.4
6.9
8.5
EX
20
19
20
19
21
5.4
5.5
5.2
5.4
5.3
1.940
1.982
1.761
1.628
1.690
-0.0005 -0.0004*|
Means
Earnings (Y)
Var (Ln Y)
Source:1989JamaicaLaborForceSurvey,secondround.
Notes: The earningsvariable(Y) is in Jamaicadollarsper year.
Allcoefficientsare statisticallysignificantat the 5% levelor better,exceptthosewitha
'.
-64 ANNEx 3. BASIcEARNIGS FUNCTIONS
Mexico 1984
Gender
Sector
Entire
Sample
Males
Females
Private
Public
0.141
0.141
0.150
0.154
0.080
Experience (EX)
0.079
0.084
0.065
0.086
0.051
-0.0010
-0.0010
-0.0010
-0.0010
-0.0007
Constant Term
9.132
9.110
9.101
8.959
10.077
R2
0.29
0.31
0.29
0.26
0.22
4,684
3,425
1,259
3,671
1,013
81,029
84,520
71,533
73,448
108,503
6.6
6.3
7.5
5.7
9.7
EX
20
21
17
20
18
0.978
0.920
1.117
1.042
0.446
Variable
Means
Earnings (Y)
Var (Ln Y)
Source:EncuestaNacionalde Ingreso-Gasto
de los Hogares.
Notes: The earningsvariable(Y)is in pesosfor the 3rd quarter.
H is the not availablehoursworked.
- 65 -
ANNEx3. BASIc EARNNGSFuNCTIoNs

Panama 1979
Sector
Gender
Entire
Sample
Males
Females
Private
Public
0.130
0.123
0.157
0.134
0.105
Experience (EX)
0.050
0.047
0.052
0.059
0.031
-0.0006
-0.0006
-0.0007
-0.0008
-0.0003
0.423
0.646
0.058*
0.525
0.419
ConstantTerm
1.847
1.248
2.721
1.286
2.430
R2
0.45
0.49
0.56
0.42
0.40
7,673
4,844
2,829
4,412
3,261
Earnings (Y)
231
250
198
193
281
8.5
7.8
9.6
7.3
10.0
EX
19
20
16
19
19
43
43
42
45
40
0.539
0.469
0.616
0.572
0.355
Variable
Means
Var (Ln Y)
Source:Encuestade Hogares- Mamode Obra(EMO),CEPAL.

Notes: The earningsvariable(Y) is in balboasper month.
Allcoefficientsare statisticallysignificantat the 5% levelor better,exceptthosewith a
-66 ANNEX3L BASICEARNNGSFUNCTIoNS
Panama 1989
Gender
Variable
Sector
Entire
Sample
Males
Females
Private
Public
0.137
0.126
0.171
0.122
0.110
Experience (EX)
0.063
0.066
0.061
0.060
0.036
-0.0008
-0.0008
-0.0007
-0.0008
-0.0004
0.749
0.701
0.684
0.750
0.591
Constant Term
0.442
0.800
0. 148*
0.504
1.891
R2
0.51
0.48
0.61
0.44
0.46
8,616
5,436
3,180
6,041
2,575
Eamings (Y)
292
312
258
232
434
9.2
8.6
10.1
8.2
11.5
EX
20
21
19
20
20
42
43
40
42
40
0.935
0.817
1.098
0.935
0.388
Means
Var (Ln Y)
Source:EncuestaHogares-Mano
de Obra(EMO),CEPAL.
Notes: The earningsvariable(Y) is in balboasper month.
All coefficientsare statisticallysignificantat the 5% levelor better,exceptthosewitha *.
- 67 -
ANNEX3. BASICEARNIGS FUNCTIONS
Paraguay 1983
Gender
Variable
Sector
Entire
Sample
Males
Females
Private
Public
0.116
0.105
0.117
0.120
0.09
Experience (EX)
0.047
0.052
0.032
0.049
0.040
-0.0006
-0.0008
-0.0004
-0.0007
-0.0006
0.326
0.275
0.345
0.324
0.346
Constant Term
7.561
8.007
7.336
7.515
7.859
R2
0.36
0.37
0.35
0.34
0.40
1,723
1,042
681
1,501
222
42,203
51,043
28,678
40,880
51,151
8.2
8.4
7.7
7.6
11.9
EX
19
19
18
19
17
49
48
49
50
39
0.642
0.543
0.585
0.661
0.415
Means
Earnings (Y)
Var (Ln Y)
Source: Encuesta de Hogares (Mano de Obra).
Notes: The earningsvariable (Y) is in guaranies per month.

H is the weekly hours worked.
-68 ANNEX3L BASICEARNINGSFUNCTIONS

Paraguay 1990
Gender
Variable
Sector
Entire
Sample
Males
Females
Private
Public
0.115
0.103
0.121
0.119
0.083
Experience (EX)
0.049
0.058
0.036
0.052
0.031
-0.0006
-0.0009
-0.0003
-0.0007
-0.0004
0.401
0.319
0.370
0.399
0.504
Constant Term
8.873
9.467
8.763
8.808
9.117
R2
0.38
0.43
0.37
0.38
0.43
1,825
1,084
741
1,599
226
239,861
290,496
165,787
236,360
264,629
9.1
9.1
8.9
8.6
12.6
EX
19
20
18
20
16
49
50
48
51
38
0.624
0.514
0.590
0.651
0.362
Means
Earnings (Y)
Var (Ln Y)
Source: Encuestade Hogares (Manode Obra).

Notes: The earningsvariable (Y) is in guaraniesper month.
-69 ANNEX3. BAsC EARNmIGSFuNCTIONS
Peru 1985
Gender
Variable
Sector
Entire
Sample
Males
Females
Private
Public
0.182
0.173
0.189
0.203
0.135
Experience (EX)
0.058
0.057
0.060
0.068
0.058
-0.0007
-0.0007
-0.0008
-0.0008
-0.0007
0.896
0.892
0.860
0.781
1.013
Constant Term
-0.373
-0.176
-0.335
-0.080
-0.618
R2
0.54
0.51
0.53
0.40
0.73
6,393
4,165
2,228
3,201
3,192
9,278
11,142
5,794
7,349
11,212
6.7
7.1
6.1
5.1
8.4
EX
24
24
24
29
19
1,854
792
1,564
1,914
1,793
Var (Ln Y)
2.689
2.468
2.755
2.829
2.271
Men
Earnings (Y)
Source:1985 Peru Survey of Living Conditions.

Notes: The earnings variable (Y) is in intis per year.
H is the yearly hours worked.
-70AM=
3. BAsIc EARNINGsFUNCIIONS
Peru 1990
Gender
Variable
Sector
Entire
Sample
Males
Females
Private
Publiq
0.081
0.085
0.065
0.090
0.090
Experience (EX)
0.053
0.053
0.053
0.058
0.036
-0.0007
-0.0007
-0.0008
-0.0008
-0.0005
0.519
0.355
0.473
0.491
0.766
ConstantTerm
6.060
6.467
6.176
6.002
5.489
R2
0.18
0.18
0.13
0.19
0.23
2,476
1,621
855
2,063
413
9,912
11,482
6,937
10,295
8,002
10.1
10.2
9.8
9.6
12.5
EX
19
19
18
19
18
8.0
8.5
7.1
8.0
7.9
0.859
0.778
0.878
0.908
0.613
Means
Earnings (Y)
S
Var (Ln Y)
Source:1990PeruSurveyof LivingConditions,Lima.
Notes: The earningsvariable(Y) is in thousandsof intisper month.
-71 Nmx 3. BASIc EARNIGS FuNCnIONS
Uruguay 1981
Gender
Variable
Sector
Entire
Sample
Males
Females
Private
Public
0.103
0.091
0.119
0.073
0.105
Experience (EX)
0.051
0.061
0.038
0.045
0.051
-0.0007
-0.0009
-0.0005
-0.0006
-0.0007
0.724
0.449
0.571
0.334
0.79Z
Constant Term
3.753
4.994
4.015
5.701
3.439
R2
0.34
0.31
0.37
0.29
0.35
10,587
6,666
3,921
2,599
7,988
4,375
5,331
2,748
4,549
4,318
8.5
8.3
8.7
9.9
8.0
EX
23
24
22
21
24
46
50
38
44
46
0.771
0.582
0.764
0.318
0.893
Means
Eamings (Y)
Var (Ln Y)
Source:EncuestaNaclonalde Hogares(ENH),CEPAL.
Notes: The eanmings
variable(Y) is in pesosper month.
- 72 -
ANNx 3. BASICEARNNGSFuNCIONS
Uruguay 1989
Gender
Variable
Sector
Entire
Sample
Males
Females
Private
Public
0.097
0.090
0.106
0.105
0.057
Experience (EX)
0.044
0.051
0.042
0.045
0.030
-0.0005
-0.0007
-0.0006
-0.0006
-0.0003
0.828
0.596
0.708
0.860
0.447
Constant Term
6.998
8.029
7.164
6.779
9.051
R2
0.40
0.35
0.42
0.41
0.28
10,981
6,567
4,414
8,434
2,547
145,840
178,086
97,865
146,073
145,069
9.0
8.7
9.3
8.6
10.2
EX
24
24
22
24
24
44
49
37
47
42
0.743
0.545
0.774
0.885
0.205
MeansI
Earnings (Y)
Var (Ln Y)
Source:EncuestaContinuade Hogares,CEPAL.
Notes: The earningsvariable(Y) is in pesosper month.
-73 ANNX 3
BASC EARNINGS
FuNCTIoNs
Venezuela 1981
Gender
Variable
Entire
Sector
Males
Females
Private
Publiq
Sample
0.118
0.112
0.140
0.121
0.109
Experience (EX)
0.054
0.060
0.042
0.063
0.032
-0.0007
-0.0008
-0.0005
-0.0008
-0.0004
0.655
0.496
0.382
0.685
0.519
Constant Term
3.614
4.305
4.314
3.382
4.467
R2
0.37
0.40
0.40
0.36
0.40
57,112
41,303
15,809
40,629
16,483
2,619
2,895
1,898
2,545
2,799
7.3
7.1
7.8
6.7
8.7
EX
21
22
19
21
21
43
45
40
44
42
0.445
0.391
0.446
0.500
0.284
Means
Earnings (Y)
Var (Ln Y)
Source: Encuestade Hogarespor Muestra, CEPAL.
Notes: The earningsvariable(Y) is in bolfvaresper month.

- 74.
ANNX3 BASICEARNINGS
FUNCTIONS
Venezuela 1989
Gender
Sector
Variable
Entire
Sample
Males
Females
Private
Public
0.084
0.084
0.080
0.097
0.066
Experience (EX)
0.022
0.031
0.019
0.027
0.017
-0.0002
-0.0003
-0.0003
-0.0002
-0.0002
0.669
0.330
0.671
0.738
0.577
Constant Term
5.103
6.311
5.153
4.626
5.746
R2
0.37
0.27
0.50
0.37
0.35
2,902
1,340
1,562
1,228
1,674
6,894
7,858
6,067
6,700
7,037
9.1
7.9
10.2
7.3
10.5
EX
22
25
21
23
22
41
46
35
46
37
0.305
0.315
0.281
0.468
0.167
Means
Earnings (Y)
Var (Ln Y)
Source:Encuestade Hogarespor Muestra,CEPAL.

Notes: The earningsvariable (Y) is in bolfvaresper month.
- 75 -
ANNEx4. ExTENDEDEARNINGSFuNcTIONs
Argentina 1989
Sample
Variable
Gender
Males
No schooling
Prim. dropout
Sec. dropout
Sec. general
Sec. vocational
Teacher training
Univ. dropout
Tertiary non-univ.
University
Experience
Exp-squared
Log hours worked
Constant
R2
Mean
-0.358
-0.204
0.197
0.615
0.549
0.430
0.891
0.694
1.182
0.046
-0.0007
0.617
5.532
0.37
4,760
Females
Sector
Private
Public
-0.351
-0.216
0.179
0.621
0.537
0.679
0.833
0.807
1.248
0.052
-0.0008
0.370
6.524
0.34
2,965
-0.341
-0.122
0.276
0.717
0.688
0.705
1.041
0.863
1.265
0.041
-0.0006
0.592
5.394
0.42
1,795
-0.302 -0.035*
-0.205 -0.182
0.122*
0.195
0.453
0.567
0.535
0.414
0.303
0.533
0.714
0.856
0.628
0.602
0.949
1.255
0.052
0.045
-0.0007 -0.0008
0.626
0.409
5.501
6.363
0.37.
0.29
1,097
2,463
8,563
4.5
14.0
35.8
21.3
3.3
9.7
0.2
7.0
1.8
5.4
23
46
0.546
5,629
1.3
13.0
25.9
17.7
4.1
11.6
2.8
7.1
7.5
9.0
21
36
0.696
7,413
1.2
14.0
35.6
21.8
4.1
10.0
0.4
6.5
1.9
4.5
22
45
0.557
M-M~~~~~~~~~~~~~~~
Y (Local Curr.)
No schooling (%)
Prim. dropout (%)
Primary (%)
Sec. dropout (%)
Sec. general (%)
Sec. vocational (%)
Teacher training (%)
Univ. dropout (%)
Tertiary non-univ. (%)
University (%)
Experience (Years)
Hours worked (Hours)
VAR (Ln Y)
7,456
1.4
13.6
32.1
20.0
3.6
10.4
1.2
7.1
3.9
6.8
22
42
0.656
Source:
EncuestaPermanentede Hogares(EPH),CEPAL.
Notes:
The earnings variable (Y) is in australes per month.

* Not statisticallysignificantat the 5% level.
8,463
1.2
7.5
19.2
17.5
2.9
11.9
4.0
9.3
10.9
15.5
21
39
0.610
- 76 ANEX 4. EXTEDED EARNNGSFuNCToNs
Bolivia 1989
Variable
Sample
No schooling
Prim. dropout
Sec. dropout
Sec. general
Sec. vocational
Teacher training
Univ. dropout
University
Experience
Exp-squared
Log hours worked
Constant
R2
N
-0.388
-0.128
0.147
0.265
0.417
0.139*
0.299
1.000
0.041
-0.0005
0.421
4.001
0.21
5,356
Gender
Sector
Males
Females
Private
Public
-0.259
-0.099*
0.147
0.289
0.516
0.192*
0.309
1.055
0.044
-0.0006
0.254
4.372
0.22
3,823
-0.452
-0.306
0.070*
0.200
0.419
0.149*
0.358
0.832
0.034
-0.0005
0.505
3.800
0.20
1,533
-0.458
-0.147
0.118
0.294
0.492
0.342*
0.487
1.109
0.049
-0.0007
0.237
4.337
0.20
2,989
-0.079*
-0.098*
0.212
0.249
0.346
0.120*
0.279
0.967
0.037
-0.0004
0.561
3.710
0.26
2,367
M-aa
Y (Local Curr.)
No schooling (%)
Prim. dropout (%)
Primary (%)
Sec. dropout(%)
Sec. general (%)
Sec. vocational (%)
Univ. dropout (%)
University (%)
Experience (Years)
VAR (Ln Y)
Source:
Notes:
364
2.1
26.9
5.4
16.4
13.3
4.5
0.5
20.3
10.5
18
8.2
0.645
402
1.9
31.7
6.1
18.6
13.5
3.0
0.4
14.3
10.5
19
8.7
0.659
270
2.5
14.9
3.8
11.0
12.9
8.3
0.8
35.2
10.6
16
7.1
0.539
EncuestaIntegrada de Hogares (EIH), CEPTAL

The earnings variable (Y) is in bolivianosper month.
H is the daily hours worked.
361
3.0
35.3
0.7
19.7
13.5
4.2
0.3
10.4
6.5
17
8.7
0.697
369
0.9
16.3
3.4
12.3
13.1
4.9
0.8
32.7
15.5
20
7.6
0.573
- 77 ANNEX4. EXTEDED EARNNGSFuNcTIoNs
Brazil 1989
No Schooling
Prim. dropout
Sec. dropout
Sec. general
Univ. diopout
Univ. dropout
Experience
Exp-squared
Log hours worked
Constant
R2
Sector
Gender
Sample
Variable
Males
Females
Private
Public
-0.911
-0.577
0.205
0.492
1.136
1.522
0.064
-0.0010
0.768
2.903
0.29
108,527
-1.022
-0.580
0.189
0.544
1.153
1.516
0.070
-0.0010
0.366
4.554
0.30
69,773
-0.718
-0.602
0.209
0.540
1.199
1.561
0.054
-0.0009
0.631
3.165
0.31
38,754
-1.117
-0.589
0.131
0.433
0.963
1.516
0.035
-0.0005
0.944
2.658
0.25
24,690
-0.280
-0.506
0.128
0.372
1.001
1.424
0.055
-0.0008
0.927
2.268
0.33
17,428
6,969
22.7
46.0
7.7
3.2
12.4
1.7
6.3
21
43
1.631
7,151
22.9
49.2
7.8
3.3
10.1
1.4
5.3
22
46
1.474
6,640
22.3
40.2
7.5
3.1
16.5
2.3
8.1
20
39
1.680
9,979
25.6
55.0
6.5
2.5
6.7
0.7.
2.9.
28
43
2.051
7,746
15.8
24.8
7.6
4.0
24.4
4.1
19.3
20
36
1.608
Mean
Y (Local Curr.)
No Schooling(%)
Prim. dropout
Primary (%)
Sec. dropout (%)
Sec. general (%)
Univ. dropout
University (%)
Experience
Hours Worked
VAR (Ln Y)
Source:
Notes:
Pesquisa Nacionalpor Amostra de Domicilios, CEPAL.

The earnings variable (Y) is in nuevos cruzados per month.
All Coefficientsare statisticallysignificantat the 5% level.
- 78 ANNEx-4.EXTEDEDEARNINGS
FucnrIoNS
Chile 1989
Variable
Sample
Gender
Males
No schooling
Prim. dropout
Sec. dropout
Sec. general
Sec. vocational
Teacher training
Univ. dropout
University
Experience
Exp-squared
Log hours worked
Constant
Females
Sector
Private
Public
-0.333
-0.171
0.287
0.566
0.785
1.025
1.120
1.736
0.038
-0.0005
0.941
5.847
0.42
-0.350
-0.188
0.280
0.606
0.883
0.915
1.110
1.811
0.044
-0.0006
0.835
6.278
0.42
-0.339
-0.141
0.347
0.611
0.753
1.292
1.263
1.687
0.026
-0.0003
0.805
6.241
0.47
-0.329 -0.084*
-0.164 -0.171
0.267
0.326
0.544
0.469
0.760
0.796
0.801
0.767
1.136
0.799
1.847
1.283
0.037
0.032
-0.0005 -0.0004
0.954
0.706
5.802
7.069
0.40
0.29
37,679
26,823
10,856
33,794
3,885
Mean
Y (Local Curr.)
No schooling (%)
Prim.
dropout (%)
Primary (%)
Sec. dropout(%)
Sec. general (%)
Sec. vocational(%)
Univ. dropout (%)
University (%)
Expe :ence (Years)
VAR (Ln Y)
40,275
5.2
23.3
17.3
24.9
19.1
0.1
0.6
5.6
4.3
21
47
0.638
43,878
5.8
25.4
18.4
25.5
17.0
0.1
0.3
4.3
3.8
22
48
0.591
31,373
3.9
18.2
14.6
23.6
24.3
0.1
1.1
9.0
5.6
20
44
0.692
38,232
5.7
25.6
18.5
25.3
18.1
0.1
0.1
4.1
2.9
22
48
0.629
58,044
0.9
3.2
7.4
21.5
27.6
0.1
4.2
19.0
16.6
20
43
0.423
-R2
Source:
Notes:
Programa Integrado de Encuestasde Hogares (PIDEH),

Encuesta Nacionaldel Empleo, IV Trimatre, 1989.
The earnings variable (Y) is in pesos per month.
* Not statistically significantat the 5% level.
- 79 FUNCTIONS
ANNEX4. EXTEDEDEARNNGS
Colombia 1989
Sample
Variable
Sector
Gender
Males
Females
Private
Public
No Schooling
Prim. dropout
Sec. dropout
Sec. general
Univ. dropout
University
Experience
Exp-squared
Log hours worked
Constant
R2
N
-0.567
-0.245
0.291
0.733
1.143
1.729
0.046
-0.0005
0.639
6.981
0.33
27,021
-0.557
-0.247
0.309
0.746
1.146
1.798
0.057
-0.0006
0.430
7.690
0.33
16,272
-0.461
-0.224
0.256
0.720
1.109
1.567
0.037
-0.0005
0.708
6.822
0.36
10,749
-0.565
-0.243
0.271
0.703
1.106
1.736
0.045
-0.0005
0.659
6.915
0.30
23,974
-0.053*
-0.179
0.380
0.595
0.899
1.373
0.035
-0.0004
0.272
8.845
0.38
3,047
Mean
Y (Local Curr.)
No Schooling(%)
Prim. dropout (%)
Primary (%)
Sec. dropout (%)
Sec. general (%)
Univ. dropout (%)
University (%)
Experience (Years)
Hours Worked (Hours)
VAR (Ln Y)
53,643
2.4
14.0
19.3
28.8
19.5
6.8
9.2
20
48
0.947
60,592
2.0
13.9
20.0
30.6
17.9
6.2
9.5
21
50
1.010
43,124
3.0
14.3
18.3
26.1
21.9
7.7
8.7
18
46
0.815
50,279
2.6
15.2
20.7
30.0
18.3
5.9
7.2
19
48
0.956
80,116
0.4
5.1
8.8
19.0
28.5
13.7
24.5
20
45
0.458
Source:
Notes:
Encuesta Nacionalde Hogares, CEPAL.

The earnings variable (Y) is in pesos per month..
- 80 FUNCrIONS
AtwX 4. EXMiDED EARNINGS
Costa Rica 1989
Sample
Variable
Gender
Sector
Males
Females
Private
Public
-0.341
-0.199
0.283
0.589
0.735
0.872
0.914
1.293
0.040
-0.0005
0.748
5.942
0.41
8,882
-0.220
-0.219
0.285
0.552
0.684
0.850
0.953
1.276
0.040
-0.0006
0.627
6.466
0.35
6,400
-0.468
-0.209
0.330
0.782
0.921
1.036
0.943
1.451
0.036
-0.0005
0.726
5.808
0.54
2,482
-0.309
-0.179
0.266
0.511
C.619
0.730
0.768
1.244
0.036
-0.0005
0.747
5.960
0.36
7,305
-0.067*
-0.037*
0.217
0.402
0.541
0.614
0.658
0.923
0.034
-0.0004
0.402
7.696
0.32
1,577
Y (Local Curr.)
No schooling (%)
Prim. dropout(%)
Primary (%)
Sec. dropout(%)
Sec. general (%)
Sec. vocational (%)
Univ. dropout (%)
University (%)
Experience (Years)
VAR (Ln Y)
16,346
5.5
22.4
34.7
15.4
10.5
1.7
4.2
0.7
5.0
21
45
0.692
17,283
6.6
25.0
36.0
15.0
8.3
1.5
3.3
0.6
3.8
22
47
0.576
No schooling
Prim. dropout
Sec. dropout
Sec. general
Sec. vocational
Univ. dropout
Tertiary non-univ.
University
Experience
Exp-squared
Log hours worked
Constant
R2
Source:
Notes:
13,928
2.6
15.9
31.5
16.2
16.1
2.2
6.6
0.8
8.1
18
41
0.922
14,245
6.3
25.4
37.9
16.0
8.2
1.3
2.4
0.4
2.1
21
45
0.677
EncuestaNacional de Hogares (ENH)Ernpleoy Desempleo, CEPAL.

The earnings variable (Y) is in colonesper month.
26,079
1.6
8.7
20.0
12.5
21.0
3.8
12.7
1.8
17.9
19
45
0.268
- 81 ANNEX4. EXrEDED EARNIGS FUNCIONS

Sample
Variable
Gender
Males
No schooling
Prim. dropout
Sec. dropout
Sec. general
Sec. vocational
Univ. dropout
University
Experience
Exp-squared
Log hours worked
Constant
Females
Sector
Private Public
-0.490
-0.171
0.339
0.433
0.411*
0.826
1.131
0.045
-0.0006
0.341
4.193
0.31
736
40.272* -0.913
-0.052* -0.358
0.316
0.415
0.491
0.347
-0.109* 0.655
0.846
0.863
0.955
1.410
0.055
0.030
-0.0008 -0.0003*
0.352
0.250
4.169
4.518
0.31
0.42
436
300
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Y (Local Curr.)
No schooling (%)
Prim. dropout (%)
Primary (%)
Sec. dropout (%)
Sec. general (%)
Sec. vocational (%)
Univ. dropout(%)
University (%)
Experience (Years)
VAR (Ln Y)
652
5.6
33.6
9.6
15.6
14.7
1.2
12.4
7.1
17
46
0.573
722
6.4
37.2
11.2
14.0
14.7
0.2
8.5
7.6
19
47
0.479
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
R2
Source:
Notes:
552
4.3
28.3
7.3
18.0
14.7
2.7
18.0
6.3
15
45
0.659
Encuesta Nacionallde Gasto Social de las Famlias.

The earnings variable (Y) is in sucres per monthi.
* Not stadstically significantat the 5% level.
- 82 -
ANNEX
4. EXTEDEDEARNIGSFUNCnONS
Ecuador 1987
Gender
Sample
Variable
No Schooling
Prim.dropout
Sec. dropout
Sec. general
Univ. dropout
University
Experience
Exp-squared
Log hours worked
Constant
R2
N
Sector
Private
Public
Males
Females
-0.545
-0.244
0.295
0.682
0.983
1.366
0.049
-0.0007
0.374
7.508
0.39
8,941
-0.319
-0.129
0.234
0.594
0.875
1.305
0.055
-0.0008
0.269
8.039
0.39
5,604
-0.408
-0.258
0.333
0.889
1.142
1.377
0.039
-0.0005
0.305
7.536
0.40
3,337
-0.532
-0.254
0.298
0.689
0.9J9
1.467
0.052
-0.0007
0.389
7.406
0.36
7,364
-0.485
0.007*
0.160
0.409
0.621
0.885
0.031
-0.0004
0.195
8.711
0.33
1,577
27,313
2.8
8.8
27.9
19.9
17.7
13.5
9.4
19
43
0.634
32,049
1.6
8.0
29.6
22.3
15.1
13.1
10.4
19
45
0.531
19,360
4.7
10.3
25.1
15.9
22.1
14.3
7.7
18
40
0.646
26,254
3.3
10.1
31.2
21.3
16.5
10.9
6.6
19
43
0.679
32,258
0.5
2.9
12.2
13.1
23.5
25.7
22.1
18
40
0.242
Mean
Y (ocal Curr.)
No Schooling(%)
Prim. dropout(%)
Primary(%)
Sec. dropout(%)
Sec. general(%)
Univ. dropout(%)
University(%)
Experience(Years)
HoursWorked(Hours)
VAR (Ln Y)
Source:
Encuesta PeriodicaSobre Enpleo y Desempleoen el Area Urbanadel Ecuador
in Quito, Cuenca,and Guayaquil.

Notes:
(Y) is the earningvariablein sucres per month. (H) is the weekly hours worked.
- 83 FUNerIONS
ANNX 4. EXMEDEDEARNINGS
El S'lvador 1990
Sample
Variable
Gender
Sector
Males
Females
Private
Public
No schooling
Prim. dropout
Sec. dropout
Sec. general
Univ. dropout
Tertiary non-univ.
University
Experience
Exp-squared
Log hours worked
Constant
R2
N
-0.478
-0.188
0.249
0.685
1.089
0.963
1.478
0.038
-0.0005
0.573
3.711
0.33
6,903
-0.552
-0.194
0.246
0.664
1.040
0.896
1.366
0.041
-0.0006
0.511
4.017
0.32
4,094
-0.293
-0.135
0.232
0.785
1.179
1.130
1.699
0.037
-0.0006
0.588
3.484
0.37
2,809
-0.437 -0.231
-0.162 -0.164
0.202
0.243
0.401
0.677
0.691
1.092
0.593
0.869
0.950
1.609
0.016
0.039
-0.0006 40.0001*
0.341
0.607
5.136
3.545
0.29
0.30
1,009
5,785
men
Y (Local Curr.)
No schooling (%)
Prim. dropout (%)
Primary (%)
Sec. dropout(%)
Sec. general (%)
Univ. dropout (%)
University (%)
Experience (Years)
VAR (Ln Y)
899
12.6
26.5
16.2
20.5
14.8
3.8
3.6
2.1
22
47
0.656
989
10.1
26.6
17.6
23.7
13.0
4.1
2.2
2.6
22
47
0.619
766
16.2
26.2
14.1
15.9
17.4
3.2
5.7
1.3
23
46
0.569
835
14.4
29.6
17.1
21.4
12.4
2.8
1.1
2.8
23
48
0.667
Source:
Notes:
Encuesta de Hogares de PropositosMuldples

The earnings variable (Y) is in colonesper month.
1,215
3.0
10.1
11.5
15.0
27.7
8.6
18.6
6.1
20
41
0.224
- 84 -
A X 4. ExTEDED EARNNGSFucnCTONs
Guatemala
1989
Variable
Sample
No Schooling
Prim. dropout
Sec. dropout
Sec. general
Univ. dropout
University
Experience
Exp-squared
Log hours worked
Constant
R2
N
Gender
Sector
Males
Females
Private
-0.931
-0.436
0.382
0.901
1.153
1.636
0.041
-0.0006
0.500
2.805
0.34
11,708
-0.902
-0.424
0.371
0.796
1.059
1.557
0.042
-0.0006
0.302
3.643
0.28
8,476
-0.948
-0.529
0.449
1.107
1.336
1.775
0.041
-0.0006
0.466
2.738
0.50
3,232
-0.864
-0.394
0.345
0.792
1.110
1.694
0.037
-0.0005
0.546
2.616
0.28
10,554
31.0
32.6
15.5
9.9
6.1
2.5
2.4
23
47
1.044
30.4
35.5
16.0
9.2
4.5
2.0
2.4
24
48
0.996
Public
-0.391
-0.173
0.339
0.571
0.702
1.098
0.026
-0.0003
0.138
4.783
0.39
1,154
kqean
No Schooling(%)
Prim. dropout
Primary (%)
Sec. dropout (%)
Sec. general (%)
Univ. dropout
University(%)
Experience
Hours Worked
VAR (Ln Y)
Source:
Notes:
32.4
25.2
14.4
11.8
10.3
3.6
2.3
21
43
1.103
33.7
34.7
15.1
9.1
4.1
1.6
1.6
24
47
1.002
EncuestaNacionalSocio-Demografica(ENSO), CEPAL.
The earnings variable (Y) is in quetzales per month.
All coefficientsare statisticallysignificantat the 5% level.
6.5
13.5
19.5
17.0
24.4
10.1
9.1
20
42
0.304
85 -
ANEx 4. ExTEDED EARNINGSFuNCTIONS

Honduras1989
Variable
Sample
Prim. dropout
Sec. dropout
Sec, general
Sec. vocational
Univ. dropout
Tertiary non-univ.
University
Experience
Exp-squared
Log hours worked
Constant
R2
N
-0.466
0.412
0.990
1.405
1.357
1.310
1.992
0.054
-0.0007
0.477
2.963
0.42
9,945
Mean
Y (Local Curr.)
No schooling (%)
Prim. dropout (%)
Primary (%)
Sec. dropout (%)
Sec. general (%)
Sec. vocational (%)
Univ. dropout (%)
University (%)
Experience (Years)
VAR (Ln Y)
453
0.0
41.1
28.1
9.5
14.6
0.3
1.6
0.9
4.1
20
47
0.990
Source:
Notes:
Gender
Sector
Males
Females
-0.525
0.374
0.898
1.200
1.173
1.111
1.879
0.057
-0.0008
0.256
3.951
0.41
6,575
-0.423
0.486
1.231
2.315
1.684
1.659
2.173
0.052
-0.0007
0.491
2.620
0.51
3,370
-0.438 -0.387
0.402
0.172
0.973
0.547
1.449
0.923
1.357
0.817
1.304
0.811
2.102
1.372
0.054
0.035
-0.0007 -0.0004
0.511
0.136
2.790
4.972
0.36
0.51
8,442
1,503
384
0.0
33.5
9.7
28.0
22.4
0.0
1.6
1.2
3.6
18
46
1.042
406
0.0
45.9
29.9
9.3
10.5
0.2
1.1
0.4
2.7
20
48
0.964
488
0.0
44.9
28.1
9.4
10.6
0.4
1.6
0.7
4.3
20
48
0.937
Private
Public
714
0.0
13.8
17.6
10.9
37.6
0.5
4.2
3.5
11.8
19
43
0.428
Encuesta Permanete de Hogares de Propositos Multiples (EPHPM),CEPAL.

The earnings variable (Y) is in lempiras per month.
- 86
AxNNE4. EXTEDEDEARNGS FVNCfONS

Jamaica 1989
Variable
Sample
Gender
Males
Females
R2
-0.469*
-0.093*
1.618
2.296
2.877
0.063
-0.0009
0.985
3.046
0.30
-0.748
-0.254*
1.570
2.050
2.973
0.089
-0.0013
0.286*
4.213
0.28
-0.168*
0.022*
1.785
2.608
2.657
0.058
-0.0010
0.945
2.878
0.42
2,127
1,172
5,886
1.1
6.3
74.7
12.0
5.0
1.0
20
5.4
1.940
9,829
1.3
7.1
77.1
9.0
4.3
1.2
19
5.5
1.982
No Schooling
Prim. dropout
Sec. dropout
Sec. general
University
Experience
Exp-squared
Log hoursworked
Constant
Sector
Private
-0.544
.0.093*
1.288
2.363
3.322
0.055
-0.0008
0.874
3.236
0.22
955
Public
-0.600*
-0.217*
1.009
1.182
1.441
0.018*
-0.0004*
2.000
2.937
0.24
1,768
359
6,443
1.1
6.8
81.2
7.1
3.3
0.6
19
5.4
1.628
3,140
1.1
3.9
42.6
36.2
13.4
3.1
21
5.3
1.690
Mean
Y (LocalCuff)
No Schooling(%)
Prim. dropout(%)
Primary(%)
Sec. dropout(%)
Sec. general(%)
University(%)
Experience(Years)
HoursWorked(Hours)
VAR(Ln Y)
Source:
Notes:
1,047
0.9
5.3
71.6
15.6
5.9
0.7
20
5.2
1.761
1989JamaicaLaborForceSurvey,secondround.
The earningsvariable(Y) is in Jamaicadollarsper year.
H is the dailyhours worked.
- 87ANxA 4. ExrENDED
EARNNGSFvNcIONS
Mexico1984
Variable
Sample
Gender
'
Sector
Males
Females
Private
Public
-1.037
-0.552
0.345
0.745
0.740
0.890
1.262
0.077
-0.001
10.074
0.29
4,684
-1.069
-0.565
0.291
0.720
0.776
0.839
1.269
0.081
-0.001
10.094
0.32
3,425
-1.049
-0.671
0.485
0.856
0.851
0.982
1.212
0.065
-0.001
10.040
0.30
1,259
-1.027
-0.561
0.391
0.809
0.929
0.934
1.498
0.084
-0.001
9.953
0.26
3,671
-0.393
-0.284
0.073*
0.379
0.306
0.464
0.786
0.048
-0.0007
10.697
0.22
1,013
Y (LocalCurr.)
No schooling(96)
Prim. dropout(%)
Primary(%)
Sec. dropout(%)
Sec. general(%)
Sec. vocational(%)
Univ. dropout(9)
University(%)
Experience(Years)
VAR (Ln Y)
81,029
9.2
26.8
23.0
25.9
5.4
0.7
3.7
5.4
20
0.978
84,520
10.3
30.0
22.4
23.9
3.8
0.4
3.9
5.4
21
0.920
71,533
6.1
18.0
24.5
31.3
9.8
1.7
3.2
5.3
17
1.117
73,448
11.3
31.2
24.7
24.9
2.3
0.4
2.6
'2.8
20
1.042
108,503
1.6
10.8
16.8
29.5
16.9
2.0
7.8
14.7
18
0.446
No schooling
Prim, dropout
Sec. dropout
Sec. general
Sec. vocational
Univ. dropout
University
Experience
Exp-squared
Constant
R2
Source:
Notes:
EncuestaNacional de Ingreso - Gastode los Hogares.
The earningsvariable(Y) is in pesosfor the 3rd quarter.

H is the Hoursof work is not available.hoursworked.
*
Not statistically significantat the 5% level.
88 -
ANNEX4 ExrEDED EARNGS FuNcTIoNs

Panama 1989
Variable
Sample
Gender
Males
No schooling
Prim. dropout
Sec. dropout
Sec. general
Sec. vocational
Univ. dropout
University
Experience
Exp-squared
Log hours worked
Constant
R2
N
-0.236
-0.251
0.395
0.901
0.493
1.239
1.764
0.068
-0.0009
0.747
1.182
0.52
8,616
-0.238
-0.243
0.359
0.794
0.467
1.107
1.713
0.070
-0.0009
0.696
1.511
0.49
5,436
292
3.4
11.0
25.2
21.4
18.9
2.2
8.7
9.2
20
42
0.935
312
4.2
12.6
27.4
22.3
16.9
2.3
6.5
7.9
21
43
0.817
Sector
Females
Private
Public
-0.426
-0.348
0.516
1.190
0.600
1.572
1.993
0.068
-0.0009
0.690
1.045
0.61
3,180
-0.152
-0.218
0.353
0.800
0.406
1.170
1.767
0.066
-0.0009
0.745
1.159
0.46
6,041
-0.272
-0.161
0.309
0.676
0.540
0.870
1.310
0.039
-0.0004
0.601
2.506
0.45
2,575
Mew
Y (Local Curr.)
No schooling (%)
Prim. dropout (%)
Primary (%)
Sec. dropout (%)
Sec. general (%)
Sec. vocational (%)
Univ. dropout (%)
University (%)
E7xperience(Years)
VAR (Ln Y)
Source:
Notes:
258
2.1
8.4
21.3
19.9
22.3
2.1
12.4
11.6
19
40
1.098
Encuesta Hogares - Mano de Obra (EMO), CEPAL.

The earnings variable (Y) is in balboasper month.
232
4.5
13.8
29.4
22.9
15.9
2.3
6.5
4.7
20
42
0.935
434
0.9
4.5
15.1
18.0
25.9
2.0
13.8
19.8
20
40
0.388
89 -
AMEX 4. EXTENDEDEARNPGS FUNCTIONS

Paraguay 1983
Sector
Gender
Sample
Variable
Males
Females
Private
Public
-0.146
0.373
0.798
1.130
1.550
0.034
-0.0005
0.353
7.932
0.35
-0.163*
0.330
0.739
1.159
1.551
0.051
-0.0008
0.338
8.544
0.33
-0.145*
-0.110*
0.075*
0.294
1.054
0.036
-0.0006
0.3001
8.979
0.49
R2
-0.213
0.317
0.679
1.029
1.532
0.048
-0.0007
0.328
8.240
0.35
-0.222
0.189
0.547
0.898
1.390
0.050
-0.0008
0.280
8.681
0.37
1,723
1,042
681
1,501
222
Mean
Y (Local Curr.)
dropout (%)
Prim.
42,203
23.9
50,143
21.9
28,678
26.9
40,880
26.7
51,151
4.5
Pi mnary(%)
27.9
26.3
30.2
30.6
9.5
Sec. dropout (%)

Sec. general (%)
Univ. dropout (%)
University (%)
Experience (Years)
VAR (Ln Y)
20.5
14.9
6.9
5.9
19
49
0.642
22.7
15.3
7.0
6.8
19
48
0.543
17.2
14.4
6.8
4.6
18
49
0.585
20.5
12.4
5.4
4.4
19
50
0.661
Prim. dropout
Sec. dropout
Sec. general
Univ. dropout
University
Experience
Exp-squared
Log hours worked
Constant
Source:
Notes:
Encuestade Hogares (Manode Obra).

The earnings variable (Y) is in guaranies per month.
H is the weeldy hours wor.ced.
* Not statisticallysignificantat the 5 % level.
20.7
32.0
17.1
16.2
17
39
0.415
-90-.
ANX 4. EXTnED EARNGS FUNCTIONS
Paraguay 1990
Males
No schooling
Prim. dropout
Sec. dropout
Sec. general
Univ. dropout
University
Experience
Exp-squared
Log hours worked
Constant
R2
N
-0.216
0.322
0.709
0.986
1.535
0.051
-0.0007
0.414
9.484
0.39
1,825
Sector
Gender
Sample
Variable
-0.226
0.192
0.569
0.797
1.394
0.057
-0.0009
0.343
10.042
0.44
1,084
Females
Private
Public
-0.230
0.257
0.748
1.118
1.498
0.040
-0.0005
0.380
9.427
0.36
741
-0.217
0.323
0.736
1.027
1.612
0.054
-0.0007
0.417
9.647
0.38
1,599
0.012*
0.130*
0.323
0.547
0.988
0.035
-0.0005
0.514
9.682
0.44
226
Mqean
Y (Local Curr.)
Prim. dropout(%)
Primary (%)
Sec. dropout (%)
Sec. general (%)
Univ. dropout (%)
University (%)
Experience (Years)
VAR (Ln Y)
Source:
Notes:
239,861
15.0
25.3
22.0
23.5
7.9
6.4
19
49
0.624
290,496
14.9
22.3
25.1
165,787
15.0
29.7
17.4
23.8
22.9
7.0
6.8
20
50
0.514
9.2
5.8
18
48
0.590
Encuestade Hogares (Manode Obra).

The earnings variable (Y) is in guaraniesper month..
236,360
16.8
28.1
23.1
31.1
5.7
5.2
20
51
0.651
264,629
1.8
5.8
14.2
39.8
23.5
15.0
16
38
0.362
- 91 -
ANNEX4. ExTENDEDEARNINGSFuNCTiONS
Peru 1990
Variable
Sample
Gender
Males
No schooling
Sec. general
Sec. vocational
Univ. dropout
Tertiary non-univ.
University
Experience
Exp-squared
Log hours worked
Constant
-0.198
0.202
0.318
0.543
0.381
0.871
0.053
-0.0008
0.527
6.716
R2
0.19
2,476
-0.172
0.174
0.276*
0.507
0.467
0.918
0.051
-0.0007
0.362
7.182
0.19
1,621
Mean
Y (Local Curr.)
No schooling (%)
Primary (%)
Sec. general (%)
Sec. vocational (%)
Univ. dropout (%)
University (%)
Experience (Years)
VAR (Ln Y)
9,912
19.4
20.2
35.0
1.3
7.1
7.1
10.0
19
8.0
0.859
11,482
17.1
21.4
37.1
1.1
7.5
5.7
10.1
19
8.5
0.778
Sector
Females
Private
Public
-0.074*
0.260
0.510
0.553
0.392
0.792
0.055
-0.0009
0.465
6.616
0.14
855
-0.213
0.223
0.342
0.587
0.435
1.072
0.057
-0.0008
0.495
6.747
0.19
2,063
-0.193
0.206
0.237*
0.562
0.428
0.786
0.040
-0.0006
0.789
6.162
6,937
23.6
17.9
31.0
1.5
6.5
.9.6
9.8
18
7.1
0.878
10,295
21.8
22.6
35.4
1.3
6.4
5.9
6.7
19
8.0
0.908
Source:
1990 Peru Survey of Living Conditions,Lima.
Notes:
The earnings variable (Y) is in thousands of intis per month.

H is the daily hours worked.
* Not statistically significant at the 5% level.
C.23
413
8,002
7.5
8.2
32.9
1.2
10.9
13.1
26.2
18
7.9
0.613
-92 f
ANNEX4. ExrEDED EARNNGS FUNCTIONS
Uruguay 1989
Variable
Sample
Males
No schooling
Prim. dropout
Sec. dropout
Sec. general
Sec. vocational
Univ. dropout
University
Experience
Exp-squared
Log hours worked
Constant
N
-0.611
-0.346
0.253
0.489
0.609
0.706
1.101
0.042
-0.0006
0.832
7.780
0.38
10,981
-0.398
-0.333
0.199
0.520
0.437
0.642
1.059
0.049
-0.0007
0.602
8.761
0.32
6,567
Mean
Y (Local Curr.)
No schooling (%)
Prim. dropout (%)
Primary (%)
Sec. dropout (%)
Sec. general (%)
Sec. vocational (%)
Univ. dropout (%)
University (%)
Experience (Years)
VAR (Ln Y)
145,840
0.9
13.0
51.6
12.2
7.6
5.4
3.6
5.7
24
44
0.743
178,086
0.7
14.3
52.1
14.4
5.5
5.0
3.3
4.9
24
49
0.545
R2
Source:
Notes:
Sector
Gender
Females
Private
Public
-0.538
-0.415
0.212
0.571
0.830
0.768
1.130
0.040
-0.0006
0.715
8.000
0.40
4,414
-0.560
-0.360
0.283
0.533
0.536
0.815
1.255
0.043
-0.0006
0.876
7.574
0.39
8,434
-0.412
-0.186
0.100
0.235
0.412
0.290
0.588
0.029
-0.0003
0.428
9.624
0.24
2,547
97,865
1.2
11.2
50.8
8.9
10.7
6.2
4.1
6.9
22
37
0.774
146,073
1.1
14.1
53.5
12.5
7.0
3.8
3.2
4.7
24
47
0.885
Encuesta Continua de Hogares, CEPAL.

The earnings variable (Y) is in pesos per month.
145,069
0.2
9.4
45.1
11.1
9.5
10.8
4.9
8.9
24
42
0.205
-93 -
ANm=N4. EXTNDED EARNNGSFuNcToNs
Venezuela1989
Variable
Sample
Gender
Sector
Males
Females
Private
Public
No schooling
-0.351
-0.357
-0.272
-0.696
0.053*
Prim. dropout
-0.100
-0.147*
-0.183
-0.205
0.001*
Sec. dropout
Sec. general
Sec. vocational
Teacher training
Univ. dropout
University
Experience
Exp-squared
Log hours worked
Constant
R2
N
0.356
0.447
0.655
0.625
0.675
0.886
0.025
-0.0003
0.687
5.445
0.37
2,902
0.517
0.408
0.748
0.540
0.735
0.908
0.037
-0.0004
0.409
6.340
0.30
1,340
0.251
0.428
0.268
0.615
0.615
0.814
0.022
-0.0004
0.675
5.569
0.50
1,562
0.432
0.257
0.445
0.358
0.582
0.581
0.505
0.415
0.646
0.584
0.990
0.760
0.027
0.021
-0.0002 -0.0003
0.578
0.744
5.132
6.013
0.38
0.35
1,228
1,674
6,968
2.8
8.8
25.6
23.3
8.3
1.7
8.6
7.8
13.1
22
41
0.305
7,962
3.2
11.7
41.1
19.4
6.0
2.5
2.0
3.4
10.6
25
46
0.315
6,067
2.4
6.3
12.3
26.6
10.4
0.9
14.2
11.5
15.3
21
35
0.281
6,700
4.1
11.6
43.5
23.3
5.3
0.6
0.7
5.4
5.5
23
46
0.468
Men
Y (Local Curr.)
No schooling (%)
Prim. dropout (%)
Primary (%)
Sec. dropout (%)
Sec. general(%)
Sec. vocational (%)
Univ. dropout (%)
University (%)
Experience (Years)
VAR (Ln Y)
Source:
Notes:
Encuesta de Hogarespor Muestra, CEPAL.

The earnings variable (Y) is in bolfvaresper month.
* Not statistically significantat the 5% level.
7,036
1.9
6.8
12.5
23.3
10.6
2.4
14.3
9.6
18.7
22
37
0.167
Policy Research Working Paper Series

Contact
Title
Author
Date
for paper
WPS1047 C6te d'lvoire: PrivateSector

Dynamicsand Constraints
EnriqueRueda-Sabater
AndrewStone
November1992
P. Infante
37642
WPS1048 Targetsand Indicatorsin World

Bank PopulationProjects
GeorgeBaldwin
November1992
0. Nadora
31091
WPS1049 MoneyDemandand SeignorageMaximizingInflation
WilliamEasterly
PaoloMauro
KlausSchmidt-Hebbel
November1992
R. Martin
31448
WPS1050MarginalIncomeTax Ratesand
WilliamEasterly
SergioRebelo
November1992
R. Martin
31448
CherylW. Gray
November1992
M. Berg
36969
WPS1052 A Reappraisalof HowOral

HodaRashad
Rehydratbon
Therapy AffectedMortality
in Egypt
November1992
0. Nadora
31091
WPS1053 Developmentof theZimbabwe

FamilyPlanningProgram
Alex F. Zinanga
December1992
0. Nadora
31091
WPS1054 DistributionalImpactof Cash and

In-KindSocial Transfersin Eastern
Europeand Russia
BrankoMilanovic
December1992
S. Moussa
39019
WPS1055 Wealth,WeatherRisk,and the

(omposition and Profitabilityof
AgriculturalInvestments
Mark R. Rosenzweig
Hans P. Binswanger
December1992
C. Banton
34783
WPS1056 Earningsand Educationin Latin

America:AssessingPrioritiesfor
Schooling Investments
GeorgePsacharopoulos December1992
YingChu Ng
EconomicGrowthin Developing
Countries
WPS1051 The Legal Frameworkfor Private
SectorActivity in the Czech and
SlovakFederalRepublic
WPS1057 Measuringthe Incomesof Economies Socio-EconomicData

of the FormerSovietUnion
Division
InternationalEconomics
Department
December1992
L. Longo
39244
E. Zamora
Policy Research Working Paper Series

Contact
for paper
Author
Date
My T. Vu
EduardBos
Ann Levin
November1992
0. Nadora
31091
WPS1034 RevisingFinancialSectorPolicy
David H. Scott
in TransitionalSocialistEconomies:
Will UniversalBanksProveViable?
November1992
K. Waelti
37664
WPS1035 How ImportProtectionAffectsthe

Philippines'Motor VehicleIndustry
WendyE. Takacs
November1992
D. Ballantyne
37947
WPS1 036 OutputDeclinein Hungary

and Polandin 1990-91:Structural
Changeand AggregateShocks
SimonCommander
FabrizioCoricelli
November1992
0. del Cid
35195
November1992
C. Cristobal
33640
November1992
WPS1038 Determinantsof ExpatriateWorkers' IbrahimA. Elbadawi
Remittancesin NorthAfrica and
Robertde RezendeRocha
Europe
A. Maraf'on
31450
WPS1039 Fducation, Externalities,Fertility,

and EconomicGrowth
MartinWeale
November1992
PHREE
33680
WPS1040 Lessonsof Trade Liberalizationin

LatinAmericafor Economiesin
Transition
Jaimede Melo
SumanaDhar
November1992
D. Ballantyne
37947
WPSI 41 Family PlanningSuccessStoriesin

Bangladeshand India
MoniNag
November1992
0. Nadora
31091
WPS1042 FamilyPlanningSuccessin Two

CitiesinZaire
Jane T. Bertrand
Judith E. Brown
November1992
0. Nadora
31091
WPS1043 DerivingDevelopingCountry
Stijn Claessens
RepaymentCapacityfromthe Market GeorgePennacchi
Pricesof SovereignDebt
November1992
R. Vo
33722
WPS1044 HospitalCost Functionsfor

DevelopingCountries
November1992
0. Nadora
31091
WPS1045 SocialGainsfrom FemaleEducation: KalanidhiSubbarao

A Cross-NationalStudy
Laura Raney
November1992
M. Abundo
36820
WPS1046World BankProject-Financed
Researchon Population,Health,
and Nutrition
November1992
0. Nadora
31091
Title
WPS1033 Latin Americaand the Caribbean
Region(andNorthernAmerica)
PopulationProjections,1992-93
Edition
Ana-MariaArriagada
WPS1037 VocationalSecondarySchooling.
OccupationalChoice,and Earnings AdrianZiderman
in Brazil
Adam Wagstaff
HowardBarnum
J. PriceGittinger
CarolBradford

Earnings and Education in Latin America - George Psacharopoulus

Diunggah oleh

Informasi Dokumen

Judul Asli

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

Earnings and Education in Latin America - George Psacharopoulus

Diunggah oleh

Hak Cipta:

Format Tersedia

,JV

LatinAmericaand the CaribbeanRegion

The PolicyResearchWorkingPaperSeriesdisseminatesthefindingsof workunderwayin theBank.Anobjectiveof theseries

EARNINGS AND EDUCATION IN LATIN AMERICA:

II. Methodology ...................................

Basic EarningsFunctions ...................................

Annex1. Survey Data Description.0.00000.....0.0.0.41

Annex3. BasicEanings Functions .....

1. Mean Earnings, Years of Schoolingand Mincerian Returns to Education: Entire

2. Mean Earnings, Years of Schoolingand MincerianReturns to Education:by Gender,

3. Mean Eamings, Years of Schoolingand MincerianRetums to Education: by Sector,

4. Over Time Earnings Differentialsby EducationalLevel .15

7. Mean Earnings, Years of Schoolingand Mincerian Returns to Education: by Gender,

8. Mean Earnings, Years of Schoolingand Mincerian Returns to Education: by Sector,

10. Private Retums to Educationby Level of Education: Full Method .30

1. Age - Earnings Profiles by Level of Education, Brazil 1989 ................

First, differencesin mean earnings between graduatesof successivelevels of education

-2Third, and beyond the above efficiencyconsiderations,the earnings premium associated

The purpose of this paper is to present evidenceon the relationshipbetween earningsand

I/ Previousstudieson the returnsto educationin LatinAmericaare listedin the Peferences.

Estimates of the profitabilityof investmentin educationcan be arrived at using different

The Full Discountinlgor Elaborate Method

a stream of costs at a given point in time:

Thereis an importantasymmetrybetweencomputingthe returnsto primaryeducation

The resultingr by solvingthe aboveequationcan be consideredto be a "private"rate

The discoundngof actual net age-earningsprofilesis the most appropriatemethodof

The earningsfunctionmethodcan be usedto estimatereturnsto educationat different

Then, after fittingthe following"extendedearningsfunction":

where Y refers to the mean earnings of an individualwith the subscripted educationallevel, k

Althoughthis method is very easy to use, it is by definitionvery inferior relative to,any

The data used in this analysiscome from a series of HouseholdSurveysconductedin the

A. Basic Earnings Functions

Among the eighteencountries, twelveof them have an average return to schoolingof 10

Table.it Mean Earnings, Years of Schoolingand Mlncerian Returns to Education:

2/ For a more detailedanalysisof the male-femaleearningsdifferentialsusingthe samesamplesand

Table 2. Mean Earnings, Years of Schooling and Mincerian Returns to Education:

Table 3. Mean Earnings, Years of Schoolingand Mincerian Returns to Education:

B. OvertimeChangesin Relative Earnings

As seen in Table 4 and depicted in Figure 2, the relative earnings of individualswith

Table 4. Over Time Earnings Differentials by Educational Level

Less than Primary*

Earnings (local curr.)

Figurie2. Time Trend of Earnings Differentialsby Level of Education In Four Countries

Table S. Over Time Educational Attainment of the Labor Force

Less than Primary*

Notes: n.a. = not available.

-20C. Overtime Returns to Education

The behavior of rates of return to schooling by gender over time demonstrates an

Table 6. Mean Earnings, Years of Schoolng and Mincerian Returns to Education:

:ble7. Mean Earings, Yem of Schoolingand Mincerian Returns to Education:

Unlikepreviousresearchi',the resultsof the presentstudy for the time trend in rate of

Therelativelyhighereducationalattainmentof publicemployeeshasnot changedduring

Table S. Mean Earnings, Years of Schooling and Mincerlan Returns to Education:

Earnings (local curr.)

Rate of Return (%)

D. Extended Earnings Functions

Table 9. Mean Earings and Mincerlan Retums to Educatlon: by Level of Education

Earnings (local curr.)

Rate of Retun (%)

E. Secondary General versus Vocational Education

S/ See Bellewand Moock(1990),Psacharopoulos

F. Private Returns to Education

With the lowest social rate of return to secondaryeducation,countries such as Argentina,