Young people experience lower employment, income and participation rates, as well as higher unemployment, compared to adults. Theory predicts that people respond to labor market information. For more than 50 years, researchers have reported on the patterns of estimated returns to schooling across economies, but the estimates are usually based on compilations of studies that may not be strictly comparable. The authors create a dataset of comparable estimates of the returns to education.
The data set on private returns to education includes estimates for 142 economies from 1970 to 2014 using 853 harmonized household surveys. This effort holds the constant definition of the dependent variable, the set of controls, sample definition and the estimation method for all surveys.
The authors estimate an average private rate of return to schooling of 10%. This provides a reasonable estimate of the returns to education and should be useful for a variety of empirical work, including critical information for youth.
This is the first attempt to bring together surveys from so many countries to create a global data set on the returns to education.
