RETURNS TO EDUCATION: A FURTHER INTERNATIONAL UPDATE AND IMPLICATIONS* GEORGE PSACHAROPOULOS

ABSTRACT This paper updates evidence on the returns to investment in education by adding estimates for new countries and refining existing estimates to bring the total number of country cases to over 60. The new cross-country evidence confirms and reinforces earlier patterns, namely, that returns are highest for primary education, the general curricula, the education of women, and countries with the lowest per capita income. The findings have important implications for directing future investment in education which, for efficiency and equity purposes, should concentrate on these priority areas.

Estimates of the profitability of investment in human capital have proliferated since the field was established in the early 1960s. Such estimates have been used to illuminate a number of key developmental issues, like the explanation of past economic growth rates (Schultz [74]), the optimality of resource allocation within education and between education and other sectors (Dougherty and Psacharopoulos [ 17]), the determinants of income distribution (Chiswick and Mincer [13]), and the behavior of students and their families as investors and consumers of education (Freeman [21]). One of the earliest questions following the human capital revolution in economic thought was: If education is a form of capital, what is the rate of return to it? This led to a related question: How does the profThe author is an Economist in the Education and Training Department of the World Bank. * I am grateful to all those who over the years have kept me informed on their work, and especially those who by correspondence provided cianfications so that thefiguresappearing here are more comparable. The views expressed are those of the author and should not be attributed to the World Bank. [Manuscript received February 1985. accepted April 1985.]

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itability of investment in education compare to investment in physical capital? Such comparisons, it was thought, would serve as ex ante signals to guide resource allocation between two forms of capital in developmental planning. They have also been used ex post to explain a great part of the "residual" that puzzled scholars examining econotnic growth in the 1950s. Other questions follow. What ptnority should be given to primary versus university education? Allocative decisions have to be made within education, and rates of return have been used as guides to such decisions. Furthermore, a given level of education can offer vatious types of curricula—for example, secondary general versus secondary technical—and estimates of the profitability of investment by type of schooling can illuminate decisions on where the relative emphasis should lie. If human capital investment is like any other type of investment., diminishing returns should apply to it. Hence, another major issue in the early days was whether and by how much the yield on human capital investment would decline following the expansion of education, When the human investment revolution began, there were no time-series estimates of the rate of return. The contrast between the social and private rate of returr could highlight the extent of public subsidization of education. The size of the private returns could also explain the individual demand for certain types of schooling. And since the private rate of return is the price one receives on his or her human resource endowments, it could further explain personal income distribution. For ail the above reasons researchers in the United States, ard later around the world, began estimating the returns to investment in education. The first rate of return to education collection appeared in the Summer 1967 issue of the Jotirnal of Human Resources and covertd only four countries—Mexico. Italy, the United States, and Great Britain Three years later Hansen [28] produced another review covering 14 countries as background for an OECD conference on education. My 197:( book [56] attempted to derive rate-of-return patterns based on evidence from 32 countries. Seven years later I updated and expanded the rate-of return estimates, covering 45 countries, as a background to the World Bank's World Development Report that dealt with human resources (Psacharopoulos [57]). Since that collection, further estimates have been published for additional countries or for more recent years in countries for which evidence on the returns to education already existed. As a result of the literature growth in this field, my "Rate of Return—New Estimates" file has become overly thick and unmanageable. Perhaps the time has come for another stock-taking exercise to determine if the earlier docuntented rate-of-return patterns have been maintained, or whether new ores are

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emerging. The enlarged and updated data set on which this paper is based covers 61 countries. THE EVIDENCE The rate-of-return evidence has been organized into a set of master tables that appear in the Appendix. The tables correspond roughly to issues to be discussed in this paper. When several rate-of-return estimates were available for a given country, year, or level of education, I have selected for inclusion in the master tables the one that in my judgment would be most comparable to the rest. This was not an easy task since many authors of the original studies do not always state explicitly the nature of the sample used (for example, urban, rural, national) or the methodology according to which the estimates are made (especially what adjustments have been made on the benefits side). Although correspondence with several authors has resulted in a more comparable set of figures, methodological and sample-reference differences remain. Hence, the reader should be cautious in attaching importance to one (or even two) percentage point differences in the returns across countries and years. Of course, greater reliance should be placed on within-countr>' estimates (for example, by level of education or by gender) that are based on a common sample and methodology. Most of the lengthy reference list is "marginal" in the sense that the reader can refer to Psacharopoulos [56, 58] to trace the original source of previously reviewed estimates. The reader is also referred to these earlier publications for details on the theoretical and methodological aspects of rate-of-return estimations. Table I is a summary of the master table that provides estimates of average private and social returns by level of education for countries grouped by their level of economic development.' The table confirms the earlier well-documented declining rate of return pattern by level of education. Primar\' education is the most profitable educational investment opportunity, followed by secondary education. This decline is the result of the interaction between the low cost of primary education (relative to other levels) and the substantial productivity differential between primar>' school graduates and those who are illiterate. The productivity of primary school graduates is not only proxied by their earnings, but has also been confirmed by studies using differences in physical output as an educational outcome.1 All figures in the text tables are simple arithmetic averages of the corresponding rates in the master tables. 2 See D. Jamison and L. Lau, Farmer Educanon and Farm Efficiency (Ballimore: Johns Hopkins University Press. 1982).

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TABLE I AVERAGE RETURNS TO EDUCATION BY COUNTRY TYPE AND LEVEL (percent)

Social Region/ Country Type Primary Secondary Higher Africa Asia Latin America Intermediate Advanced

26 27 26 13 NA

17 15 18 10 11

13 13 16 8 9

Private Primary Secondary Higher 45 31 32 17 NA

26 15 23 13 12

32 18 23 13 12

Source: Based on Appendix Table A-1, latest year available. Note: NA ^ not available because of lack of a control group of illiterates. TABLE 2 INDEX OF PUBLIC SUBSIDIZATION OF EDUCATION BY LEVEL AND REGION Region/Country Type Africa Asia Latin America Intermediate Advanced

Primary 92 5S 104 51 NA

Educational Level Secondary 51 13 47 6 21

Higlier 157 9 50 7 44

Source: Based on Appendix Table A-1, strictly comparable rates. Notes: The subsidization index for a given level of education is defined as the percent by which the private rate of return exceeds the social rate. NA = not available.

The declining rate-of-return pattern is also observed across levels of per capita income. For example, the returns to any level of education are highest in Africa and lowest in the advanced industrial countries. This is explained by the relative scarcity of human-to-physical capital within each group of countries. In all countries and levels of schooling, private returns exceed social returns because education is publicly subsidized. However, the privatepublic distortions are greatest in the poorest group of countries and in the higher levels of education (Table 2). Figure 1 illustrates this phenomenon for Africa. Whereas the social rates of return follow a declining

Psacharopoulos

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Rate of return (percent) 50 r

40

Private rate 30

20 ^

\

Social rate 10 •

Educational level Primary

Secondary

Higher

FIGURE 1 DIFFERENCES BETWEEN THE PRIVATE AND SOCIAL RETURNS TO EDUCATION IN AFRICA

Source: Based on Appendix Table A-1, strictly comparable rates. pattern by ascending level of education, the private rates are not only higher than social rates, but they increase after the secondary level. Table 3 gives means of the regression coefficient on years of schooling in a semi-log (Mincer-type) earnings function in which log earnings is a function of years of schooling, years of experience, and years of experience squared. The figures are interpreted as private returns to the typical year of education (that is, undiff'erentiated by level). Again, the declining pattern of the returns across country' type is largely maintained. Rate-of-return estimates in recent years have been refined in the sense that they are increasingly based on the earnings of those employed in the cotnpetitive sector of the economy where the benefits of education better reflect the worker's productivity. Table 4 shows that in studies where the returns have been differentiated by economic sector, the returns in the competitive setting exceed those in the noncompetitive sector by

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TABLE 3 MINCER-TYPE RETURNS TO EDUCATION BY COUNTRY TYPE

Region/Countr>' Type Africa Asia Latin America Intermediate Advanced

Coefficienl on Years of Schooling (percent) 13 11 14 8 9

Source: Master table listing the individual country rates is available from the author on request. Note: The following countries are included in each region: Africa: Ethiopia, Kenya. Morocco, Tanzania; Asia: Hong Kong. Malaysia, Pakistan, Singapore, South Korea, South Vietnam, Sri Lanka, Taiwan, Thailand; Latin America: Brazil, Chile, Colombia, Costa Rica, El Salvador. Guatemala, Mexico, Venezuela; Intermediate: Cyprus, Greece, Iran, Portugal; Advanced: Australia, Canada, France, Germany. Japan, Sweden. United Kingdom, United States. TABLE 4 AVERAGE RETURNS TO EDUCATION BY ECONOMIC SECTOR Sector SF>ecification Competitive, private Noncompetitive, public

Rate of Return (percent) 13 10

Source: Master table listing individual countries is available from the author on request. Nole: The countries included in this table are Brazil, Colombia, Greece, Guatemala, Japan, Malaysia, Pakistan. Poriugal, United Kingdom. Tan;'_ania, and Venezuela. three percentage points. This means that previous estimates based on the earnings of workers in all sectors have in fact underestimaied the i*elurns to education. The inclusion of public-sector earnings in particular, because of the equalization policy of pay scales, flattens mean earnings differentials and, hence, depresses the returns to education. For a variety of reasons, women in all countries earn on average substantially less than men. Because the rate of return is a relative concept, it should not be surprising ifthe profitability of investment in women's education is greater than that of men. This is, indeed, the case, as

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shown in Table 5, where in developing countries the Mincer-type average rate of return for women exceeds that for men by four percentage points. This rate-of-return differential in favor of women may be an underestimate because the rate of return to investment in women's education, as commonly calculated, does not take into account the increased probability of more educated women patlicipating in the labor force. For example, Mohan [47] reports that in Colombia in 1984 the labor force participation rate of working-age women aged over 15 ranged from 31 percent for those who had no schooling to 53 percent for those with a university education. It is commonly thought that introducing a vocational element in the secondary school curriculum, especially in developing countries, is conducive to economic development. But. as shown in Table 6, the returns to investment in traditional academic (general) curricula are greater on average than the returns to investment in specialized subjects. Again, this is due to the higher unit cost of producing technical graduates and the fact that graduates from both streams are absorbed equally well by the labor market. TABLE 5 AVERAGE RETURNS TO EDUCATION BY GENDER

(percent) Country Group

Educational Level

All countries

Primary Secondary Higher Overall

Developing countries

Men

Women

19 16 15 11

17 21 14 15

Source: Based on Appendix Table A-2. TABLE 6 AVERAGE RETURNS TO ALTERNATIVE SECONDARY SCHOOL CURRICULA

Curriculum Type General, academic Vocational, technical

Rate of Return (percent) 16 12

Source: Master table listing individual countries is available from the author on request. Note: Countries included in this table are Colombia, Cyprus, France. Indonesia, Liberia, Taiwan, and Tanzania.

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The same pattern observed regarding the type of secondary school curriculum also applies to higher education programs. The high-cost specialties like agronomy exhibit low returns, whereas humanities and the social sciences exhibit high returns (Table 7). Ratc-of-return estimates over time within countries are ran-. What is even rarer are estimates based on the same sampling frame and methodology from year to year. In the country where the highest quality time series data exist, the United States, the returns have shown a remarkable stability over a 30-year period. For example, the social returns to higher education fluctuated around the 10-11 percent mark between 1939 and 1969 (Appendix Table A-1). In Japan, the corresponding returns fell from 6.4 to 5.7 percent in a seven-year period. In Great Britain, the returns remained virtually constant between 1971 and 1978. In Colombia, the returns to education (Mincer-type estimation) declined from 17.6 to 14.4 percent between 1973 and 1978, while in the same five-year period the percentage with higher education in the labor force has more than doubled (from 6 percent in 1973 to 13 percent in 1978, based on Mohan [48], pp. 40, 43). This relative stability of average returns over time has been ex plained by the fact that the demand for educated manpower has kept increasing along with the supply of education (a phenomenon Jan Tinbergen has lucidly described as the race between technology and education 180]). Table 8 presents comparisons of average returns to physical and buman capital in two time periods. Given the roughness ofthe data, the evidence suggests that in advanced countries the gap has narrowed somewhat between the returns to physical and human investment, tmd the convergence indicates that a 10 percent return may be indicative of some equilibrium. In developing countries, however, there is a clear advantage of human versus physical capital investments. Of course this advantage TABLE 7 AVERAGE RETURNS FOR SELECTED UNIVERSITY PROGRAMS Program Economics Law Social sciences Medicine Engineering Sciences, math, physics Agriculture Source: Based on Appendix Table A-3.

Rate of Return (percent) 13 12 11 12 12 8 8

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TABLE 8 RETURNS TO HUMAN AND PHYSICAL CAPITAL BY TYPE OF COUNTRY

(percent) 1960s Type of country Developing Advanced

Human 20 8

>

' of Finance and Development Planning. "Botswana: Education and Human Resource Sector Assessment." USAID, June 1984. Mimeo. F. Bourgignon. "The Role of Education in the Urban Labor-Market During the Process of Development: The Case of Colombia." Paper presented at the 6th World Congress, International Economic Association, Mexico City, August 1980. Martin Carnoy. "The Rate of Return to Schooling and the Increase in Human Resources in Puerto Rico." Comparative Education Review 16 (February 1972): 68-86. Barry R. Chiswick and P. W. Miller. "Immigrant Generation and Income in Australia." Department of Economics, University of Western Ontario, 1984. Mimeo. Barry R. Chiswick and Jacob Mincer. "Time Series Changes in Personal Income Inequality in the United States from 1939, with Projections to 1985." Journal of Political Economy 80 (May-June 1972): S34-71. Carmel U. Chiswick. "On Estimating Earnings Functions for LDCs." Journal of Development Economics 4 (March 1977): 67-78. W. Clement. Kinkimmenverteilung und Qualifikation: Empirische Ergebnisseaus dem osterreichischen Mikrozensus 198!. Signum-Verlag. 1984. W. Clement, M. Tessaring, and C. Weisshuhn. Au.shildung undEinkommen in der Bundesrepublik Deutschland. Beitrab 80. Nurnberg: Institut fur Arbeitsmarkt- und Berufsforschung der Bundesanstalt, 1983. Christopher Dougherty and George Psacharopoulos. "Measuring the Cost of Misallocation of Investment in EdncaMon.'''' Journal of Human Resources 12 (Fall 1977): 446-59. J. Ducci and K. Terrell. "Earnings and Occupational Attainment in a Developing Country." Department of Economics, Cornell University. Paper presented at the Econometric Society Meetings, September 1980. A. Dumlao and A. Arcelo. "Financing Private Education." FAPE Review 16 (July-October 1979). A. C. Edwards. "Wage Indexation, Real Wages and Unemployment." Washington: Development Research Department, The World Bank, 1983. Mimeo. Richard B. Freeman. The Overeducated American. New York: Academic Press, 1976. A. Gabregiorgis. "Rate of Return on Secondary Education in the Bahamas."

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Ph.D. thesis. Department of Educational Administration, University of Alberta, 1979. K. Gannicott. "Male and Female Earnings in a Developing Econcmy: The Case of Taiwan." Department of Eeonomics, University of New South Wales, 1984. Mimeo. N. Gebre-ab. "Cost-Benefit Analysis of Education in Lesotho." Lesotho Ministry of Education, November 1983. S. E. Guisinger, J. W. Henderson, and G. W. Scully. "Earnings, Rates of Return to Education and the Earnings Distribution in Pakistan." Economics of Education Review {December 1984). E. Gutkind. "Earnings Functions and Returns to Education in Sri Lanka." Geneva: International Labor Office, 1984. Mimeo. K. A. Hamdani. "Education and the Income Differentials: An Estimation for Rawalpindi City." Pakistan Development Review 16 (Summer 1977): 144-64. W. Lee Hansen. "Patterns of Rates of Return in Education: Some International Comparisons." In Conference on Policies for Educational Growth. Paris: OECD, 1970. Mimeo, DAS/ElD/70.3. Robert H. Haveman and Barbara L. Wolfe. "Schooling and Economic WellBeing: The Role of Nonmarket Effects." Journal of Human Resources 19 (Summer 1984): 377-407. J. W. Henderson. "Earnings Functions for the Self-Employed." Journal of Development Economics 13 (August-October 1983): 97-102. J. W. Henderson and G. W. Scully. "The Impact of the Elasticity of Substitution on Rates of Return to Education." Waco, TX: Baylor University, 1984. Mimeo. W. J. House and O. Stylianou. "Population, Employment Planning and Labor Force Mobility in Cyprus: An Interim Report." Nicosia: Department of Statistics and Research, Ministry of Finance, 1981. Fan-Sing Hung. "Private and Social Rates of Return on Investment in Education in Hong Kong." Master's thesis. School of Education, Chinese University of Hong Kong, 1982. J-P. Jarousse. "La Rentabilite des Etudes en France entre 1970 et 1977." Paris: CREDOC, 1984. Mimeo. Chang Yong Jeong. "Rates of Return on Investment in Education: The Case of Korea." KDI Working Paper No. 7048, September 1974. Hwai-I Juang. "Rates of Return to Investment in Education in Taiwan and Their Policy Implications: A Cost-Benefit Analysis of the Academic High School and the Vocational High School." D. Ed. thesis. Teachers College, Columbia University, 1972. J. B. Knight and R. Sabot. "The Returns to Education: Increasing with Experience or Decreasing with Expansion." Oxford Bulletin of Economics and Statistics 43 (February 1981): 51-71. Kwok-Chuen Kwok. "An Analysis of the Earnings Structure in Hong Kong." M. Phil, thesis. Graduate School, Chinese University of Hong Kong, 19??. Yong Woo Lee. "Human Capital and Wage Determination in South Korea." Kyungbook National University, 1984.

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L. Levy-Garboua and A. Mingat. "Les Taux de Rendement de TEducation." Ch. 5 in Economique de I'Educaiion. eds. J-C. Eicher and L. Levy-Garboua. Paris: Economica, 1979. Liberia Ministry of Planning and Economic Affairs. "Liberia: Education and Training Sector Assessment." Joint Committee for the Government of Liberia/USAID Education, Training and Human Resources Assessment, December 1983. Mimeo. Pak-Wai Liu and Yeu-Chim Wong. "Human Capital, Occupation and Earnings." Department of Economics, Chinese University of Hong Kong, 1984. D. Mazumdar. The Urban Eabor Market and Income Distribution: A Study of Malaysia. Oxford: Oxford University Press, 1981. P. W. Miller. "The Rate of Return to Education: The Evidence from the 1976 Census." Au.stralian Economic Review (3rd quarter 1982). A. Mingat and J-P Jarousse. "Analyse Economique et Fondements Sociaux des Disparites de Salaires en France." Paris: CREDOC, 1985. Mimeo. A. Mingat, J-P. Tan, and M. Hoque. "Recovering the Cost of Public Higher Education in LDCs: To What Extent Are Loan Schemes an Efficient Instrument?" Washington: Education Department, The World Bank, 1984. Mimeo. R. Mohan. "Labor Force Participation in a Developing Metropolis, Does Sex Matter?" Paper presented at the Latin American Econometric Society Meeting, Bogota. Washington: Development Research Department, The World Bank, July 1984. Mimeo. —— . The Determinants of Labor Earnings in Developing Metrupoli: Estimates from Bogota and Cali. Colombia. Staff Working Paper No. 498. Washington: The World Bank, 1981. R. M. Morgan, ed. System Analysis for Educational Change: The Republic of Korea. Tallahassee: Florida State University, 1971. K. Okaehi. "An Analysis of Economic Returns to Educational Investment: Its Role in Determining the Significance of Educational Planning in Japan." Ph.D. dissertation, Florida State University, 1980. . "An Analysis of Economic Returns to Japan's Higher Education and Its Application to Educational Finance." Journal of Education Finance 9 (Fall 1983). Funkoo Park. "Return to Education in Korea." Journal of Economic Development I, No. 1 (1976). Funkoo Park and Seil Park. Wage Structure in Korea, Korea Development Institute, 1984. Seil Park. "Wages in Korea: Determination of the Wage Levels and the Wage Structure in a Dualistic Labor Market." Ph.D. dissertation, Cornell University, 1980. M. Pourhosseini. "Investment in Human Capital and Educational Planning in Iran." Ph.D. thesis. Department of Economics, University of Birmingham, 1980. George Psacharopouios. Returns to Education: .An International Comparison. San Francisco: Elsevier-Jossey Bass, 1973.

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. Higher Education in Developing Countries: A Cost-Benefit Analysis. Staff'Working Paper No. 440. Washington: The World Bank, 1980. . "Returns to Education: An Updated International Comparison." In Education and Income, ed. T. King. Staff Working Paper No. 402. Washington: The World Bank, 1980. Reprinted in Comparative Education 17 (1981a): 321-41. . "Education and the Structure of Earnings in Portugal." De Economist 129 (1981b): 532-45. . "Indonesia: Manpower Considerations in the Energy Sector." Washington: Education Department. The World Bank, May 1982a. Mimeo. . "Peru: Assessing Priorities for Investment in Education and Training." Washington: Education Department, The World Bank, 1982b. Mimeo. . "Upper Volta: Is It Worth Spending on Education in z. 'HighCost' Country?" Washington: Education Department, The Workl Bank, 1982c. Mimeo. . "Earnings and Education in Greece, 1960-1977." European Economic Review 17 (I982d): 333-47. . "The Economics of Higher Education in Developing Countries." Comparative Education Review 26 (June 1982e): 139-59. —: "Sex Discrimination in the Greek Labor Market." Modern Greek Studies i (Oetober 1983a): 339-58. —. "Education and Private Versus Public Sector Pay." Labour and Society 8 (April-June 1983b): 123-34. George Psacharopoulos and W. Lox\ey. Diversified Secondary Education and Development: Evidence from Colombia and Tanzania. Baltimore: Johns Hopkins University Press, 1985. George Psacharopoulos and A. Zabalza. "The Effect of Diversified Schools on Employment Status and Earnings in Colombia." Eeonomics of Education Reviews, No. 3(1984). J. R. Quintas. Economia y Educacion. Piramide, 1983. M. Riboud. Accumulation du Capital Humain. Paris: Economica, ; 978. E. Rodriguez. Rentabilidad y crecimiento de la Educacion Superior en Colombia. Facultad de Estudios Interdisciplinarios, Pontificia Universidad Javeriana, 1981. P. N. Savvides. "Work Experience and Earnings Differentials: The Case of Cyprus." M. A. thesis. Department of Economics, Southern Illinois University, 19??. T. P. Schultz. "Conventional Income Equations for Rural and Urbar Workers by Current Residence and Birthplace: Colombia 1973." Yale University, April 1979. Mimeo. T. W. Sehultz. "Education and Eeonomie Growth." In Social Forces Influencing American Education. Chicago: National Society for the Study of Education, 1961. K. Sethasathien. "Thailand: Using Cost-Benefit Analysis to Derive the Rates of Return in Different Levels of Education. Ph.D. dissertation. College of Education, Florida State University, 1977.

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76. Somalia Ministry ofNational Planning. "Somalia: Education and Human Resources Sector Assessment." USAID, January 1984. Mimeo. 77. F. Steier. "Educational Policies in Venezuela: An Appraisal." Ph.D. dissertation. Columbia University, in progress 1985. 78. D. A. Sumner. "Wage Functions and Occupational Selection in a Rural Less Developed Country Setting." Review of Economics and Statistics 63 (November 1981): 513-19. 79. J. B. C. Tilak. "Inequality in Returns to Education." Ph.D. dissertation, Delhi School of Economics, 1980. 80. i. Tinbergen, Income Distribution: Analysis and Policies. Amsterdam: NorthHolland, 1975. 81. G. Weisshuhn and W. Clement. "Analyse der qualifikations spezifischen Verdienstrelationen in der Bundesrepublik Deutschland auf der Basis der Bescheftigtenstatistik 1974/1977." Mitteilungen aus der Arbeilmarkt und Berufsforschung 1 (1982): 36-49.

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THE JOURNAL OF HUMAN RESOURCES APPENDIX TABLE A-1 RETURNS TO INVESTMENT IN EDUCATION BY LEVEL (percent)

Country Africa Botswana Ethiopia Ghana Kenya Lesotho Liberia Malawi Morocco Nigeria Rhodesia Sierra Leone Somalia Sudan Tanzania Uganda Upper Volta

Asia Hong Kong India Indonesia Malaysia Pakistan Philippines Singapore South Korea

Taiwan

Year

Prim.

1983 1972 1967 1971 1980 1980 1983 1978 1982 1970 1966 I960 1971 1983 1974 1982 1965 1970 1975 1982

42.0 20.3 18.0 21.7

1976 1965 1978 1977 1978 1978 1975 1979 1971 1977 1966 1967 1969 1971 1973 1980 1970 1972

10.7 41.0 14.7 50.5 23.0 12.4 20.0 20.6

Social Sec. Higher 41.0 18.7 13.0 19.2 13.0 18.6 17.0 15.1 15.2 10.0 12.8 22.0 10.4

15.0 9.7

16.5 8.8 10.2 8.0

11.5 13.0 17.0

Prim. 99.0 35.0 24.5 28.0

38.0 27.4 37.0 31.0

15.5 99.0

76.0 22.8 17.0 33.0 14.5 26.7 30.5

15.7

16.8

46.6

30.0

14.0

34.0

59.9

13.0 13.0

33.2 15.0

18.5 18.8 19.8 15.6

25.2 16.2 13.2

32.6 11.0

34.5 27.0

6.7 6.5

9.4 9.5

20.0

16.0 25.4

16.1

16.2

17.6 12.7

18.4 15.8

4.0

66.0 25.9 27.7 20.1

28.6 60.6 30.1 14.9

12.0 22.0 21.3

13.4 29.3

15.0 15.5 13.7

12.4 10.3 10.8

21.9

16.2

14.8

13.0

9.0

8.0

20.0 14.6

7.0

6.5

8.5 8.5

9.0

6,6

17.6

I4.I

9.0

5.0 9.5 9.3 8.8

8.1

27.0

26.5 12.3

36.5 17.0

9.5

19.9

8.0 5.0

ll.O 14.6 12.2

Private Sec. Higher

11.7 15.0 17.7

17.3 33.4 25.5

50.0

Psacharopoulos

599

APPENDIX TABLE A-1 (Continued) Private

Social Country

Year

Prim.

Sec.

Higher

Prim.

Sec.

iigher

Thailand

1970 1972

30.5 63.2

13.0 30.9

11.0 18.4

56.0

14.5

14.0

13.1 12.2

26.1 24.7

13.9

24.0

20.6 23.5 16.9

Latin America Bahamas Brazil Chile Colombia

Costa Rica Mexico Paraguay Peru

Puerto Rico Venezuela Intermediate Cyprus-1 Cyprus~2

Greece Iran Iran-2 Israel Spain Turkey Yugoslavia Advanced Australia Austria Belgium Canada Denmark

1970 1970 1959 1973 1976 1981 1974 1963 1982 1972 1974 1980 1959 1957 1984 1975 1979 1975 1979 1962 1977 1972 1976 1975 1958 1971 1968 1969 1969 1976 1981 1960 1961 1964

15.1

15.4

20.7 24.9

13.1 32.0

8.7 23.0

25.7 29.0

68.2

52.1 18.0 11.7

29.0 27.0 20.6

11.2 8.1 11.6 7.0 1.1 6.0

14.8 14.1 8.6 5.6 14.0 5.5

21.2 15.3 6.9 10.2 24.0 15.3

18.5 19.3 8.0 15.5 26.0 2.6

14.0 8.1 11.3 21.2 16.3

13.9 21.1 4.2 8.7 19.7 10.0

18.4 9.6 25.0 14.0 46.9 34.3 41.4 24.0 82.0

17.0 11.0 19.8 9.0 3.3 34.1 17.0

23.0 13.0 16.3 15.0 16.1 15.5 23.0

32.5 15.0 8.6 7.7 16.5 34.0 15.2

10.5 6.8 6.3 5.5 11.5 17.6

16.5 17.2

6.9 8.6

9.3

15.4

9.7 7.6 13.7 4.5 15.0 13.6 6.6 12.8 8.5 2.8

16.3 17.1 11.7

6.7 14.0 7.8

15.4

20.0 10.6 27.0 31.6 7.6

600

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THE JOURNAL OF HUMAN RESOURCES APPENDIX TABLE A-1 (Continued)

Country

Year

France

1962 1969 1976 1964 1978 1971 1972 1973 1975 1977 1978 1969 1967 1973 1976 1980 1965 1966 1966 1967 1939 1949 1959 1969 1970 1971 1972 1973 1974 1975 1976

Germany Great Britain

Italy Japan

Netherlands New Zealand Norway Sweden United States

Prim.

Social Sec. Higher lO.I

9.6

10.9

11.0 3.6 8.0 7.0 8.0 9.0

7.0 8.2 8.0 7.0 6.0 7.0

4.6 8.6

6.4 6.9 5.7 5.5 13.2 7.5 9.2 10.7 10.6 II.3 10.9

5.2 19.4 7.2 10.5 18.2 14.2 10.1 10.7

Prim. 14.3 16.2 13.5

Private Sec. Higher 11.5 12.0 10.8 6.5 14.0 11.7 6.0 9.0 9.0 11.0 17.3

!3.4

5.9 10,4 8.5 20.0 7.4

9,3 9.6

9.3 4.6 10.5 27.0 9.6 16.0 22.0 17.0 23.0 18.3 10.5 8.1 8.8 8.3 10.4 14.7

7.7 10.3

18.8 11.3 12.5 11.3 12.0 14.8 12.8 U.O

15.4 8.8 8.0 7.8 5.5 4.8

5.3 5.3

Sources: Australia: 1976. Miller [44], Tables 1 and 2; Austria: Clement [15]; Bahamas: Gabregiorgis [22]. Table 33; Botswana: Botswana Ministry ol" Finance [9], Table 2-50; Colombia: 1976. Higher, Rodriguez [71], Table 6, 1981, Psacharopoulos and Zabalza [68], average ofall secondary school subjects; Costa Rica: based on Baldares-Carazo [6], Table 7.19: Cyprus-1: regression derived rates (1979). private rates. House and Stylianou [32], Table VI-4, 1975. private rates, Psacharopoulos [58], Table 1; Cyprus-2: rates refer to males. House and Stylianou [32], Table VI-3; France: 1962. Riboud [70], 1969 and 1976, Mingat and Jarousse [45], social and private rates not compiirable for 1969 as estimation in each year based on different methodologies, s^e

Psacharopoulos

\

601

APPENDIX TABLE A-1 (Sources, continued) Jarousse [34]; Germany: 1978, Clement, Tessaring, and Weisshuhn [16]; Great Britian: Adamson and Reid [1], Table 5; Greece: Psacharopoulos [63], Table 8; Hong Kong: Hung [33], Table 6: India: 1978. Tilak [79], Table 6.3; Indonesia; Psacharopoulos [60], Table 7.1; Iran: Armand [3], Table 5.7; Iran-2: Henderson and Scully [31]. Table I; Iran: Pourhosseini [55], Table 9.2; Japan: higher education from Okaehi [51], Table 12, other levels from Okaehi [50], Tables 17 and 10; Kenya: 1980, Armitage and Sabot [4], Table 3, government schools; South Korea: 1969. Morgan [49]. 1971, social, Jeong [35], 1971, private. Lee [39], Table 4, both sexes, col. B, 1973, Park [52], 1980, Park and Park [53]; Lesotho: Gebre-ab [24], Table 12; Liberia: Liberia Ministry of Flanning/USAID [41], Table 2-26; Malawi: Mingat, Tan, and Hoque [46], Table 5; Pakistan: 1975. Hamdani [27], Table 3, 1979 based on mean earnings in urban areas. Population and Labour Migration Survey, kindly supplied by Shahrukh Rafi Khan; Paraguay: based on income and cost data supplied by Ernesto Schiefelbein; Peru: Psacharopoulos [61], Table 3.4; Philippines: 1977. University of Philippines, Dumlao and Arcelo [19], p. 161; Puerto Rico-2: Carnoy [11], Tables 2 and 4, average of males and females in urban areas; Somalia: Somalia Ministry of National Planning [76], Table 2-36; Spain: Quintas [69], Table 2.3; Sudan: Berhanu [7], Table 4.12; Taiwan: Juang [36], Tables 6-U-36 and 6-44; Tanzania: Psacharopoulos [67], average ofall secondary school subjects; Thailand: Sethasathien [75], Table 9; Upper Volta: Psacharopoulos [62], Table 2.6; Venezuela: 1984. Stcier [77], short-cut method, average for males and females. For the original source ofall other countries and survey years not explicitly mentioned above, see Psacharopoulos [58], Table 1. Note: Private rates to primary education in excess of 100 percent have been set to 99.0.

602

THE JOURNAL OF HUMAN RESOURCES APPENDIX TABLE A-2 RETURNS TO EDUCATION BY GENDER (percent)

Country

Year

Educational Level

Men

Women

Australia Austria Colombia

1976 1981 1973

Costa Rica France

1974 1969

University All All—urban —rural All Secondary University Secondary University All All Secondary University All University University Secondary University All All All All Primary Secondary University Primary All All

21.1 10.3 18.1 10.3 14.7 13.9 22.5 14.8 20.0 13.1 13.6

21.2 13.5 20.8 20.1 14.7 15.9 13.8 16.2 12.7 11.2 11.7 8.0 12.0 4.5 6.9

1976 Germany Great Britain Greece Japan

1974 1977 1971

South Korea

1977 1976 1980 1971

Sri Lanka Portugal Puerto Rico

1976 1980 1981 1977 1959

Taiwan Thailand Venezuela

1982 1971 1984

10.0 8.0 4.7 6.9 5.7 13.7 15.7 10.3 17.2 6.9 7.5

29.5 27.3

21.9 8.4 9.1 9.9

5.8 16.9 22.9 1.7 5.0 7.9 8.4 18.4 40.8 9.0 16.1 13.0 13.5

Sources: Australia: Miller [44], Table 1; .Austria: Clement [15], Table III. 5; Colombia: Schultz [73], Table 4; Costa Rica: Baldares-Carazo [6], Table 7-18; Germany: Weisshuhn and Clement [81], Table 3; Greece: Psacharopoulos [65], Table 7; Great Britain: Adamson and Reid [1], Table 2, social rates; Japan: Okaehi [51], Table 12-13, social rates; South Korea; 1971, Lee [39], Table 4, col. B, 1976, Bai [5], Tables IX.3 and 4, col. 3, 1980, Park and Park [53], Table 2-3; Portugal: Psacharopoulos [59], Table 2; Puerto Rico: Carnoy [11], Table 4, social rates in urban areas; Taiwan: Gannicott [23], Table 1, log earnings coefficient on primary schooling vs. illiterates; Thailand: Chiswick [14]; France: Jarousse [34]; Sri Lanka: Gutkind [26], Table 5; Venezuela: Steier [77].

Psacharopoulos

603

APPENDIX TABLE A-3 RETURNS TO HIGHER EDUCATION BY SUBJECT (percent) Country

Year

Subject

Belgium

1967

Economics Law

Brazil

1962

Sciences Medicine Economics Law

Canada

1967

Colombia

1976

Medicine Engineering Agriculture Economics Engineering Economics Engineering Medicine Law

Denmark

1964

Agronomy Economics Law

France

1970

Greece

1977

Engineering Medicine Law and Economics Sciences Physics and Mathematics Agronomy Law

Great Britain

1967

1971

India

1961

Iran

1964

Engineering Economics and Politics Arts Social Sciences Engineering Sciences Arts Sciences Engineering and Technology Social Sciences Humanities Engineering Economics Humanities Engineering Agriculture

Social

Private

9.5 6.0 8.0

11.5 16.1 17.4 11 .9 17.3 5.2 9.0 2.0

16.3

26.2 24.8 23. 7 22.7 16.4

32.7 33.7 35.6 28.3 22.3

4.5

9.0

10.0 8.0 5.0

16.7 12.3 1.8 2.7

2.1 3.1

12.0

13.8 12.2

8.2 4.4

5.4

13.5 13.0 11.4 11.0 7.0 7.0 6.0

11.0 12.7 16.6 18.5 15.3 18.2 13.8

26.0 38.0 32.0 48.0 14.3 21.2 23.9 20.0 30.7 27.4

604

I

THE JOURNAL OE HUMAN RESOURCES APPENDIX TABLE A-3 (Continued)

Country

Year

Subject

Malaysia

1968

Norway

1966

Philippines

1969

Sweden

1967

Engineering Medicine Agriculture Economics Law Arts Engineering Sciences Medicine Agriculture Economics Law Engineering Agriculture Economics Law Medicine Engineering

Social

Private 13.4 12.4

9.8 8.9 10.6 4.3 8.7 6.2 3.1 2.2 10.5 15.0 8.0 5.0 9.0 9.5 13.0 7.5

14.0 18.0 15.0 5.0

Sources: Colombia: Rodriguez [71], Table 6; Greece: Psacharopoulos [63], Table 8; Great Britain: Adamson and Reid [I], Table 3. All other countries from Psacharopoulos [57], Appendix G, and Psacharopoulos [56], Table 4.9.