Earnings and Education in Latin America

This paper uses household survey data for 18 Latin American countries to assess earnings differentials by level of education and how these differentials have changed during the 1980s. Introduction of the cost of education allows the estimation of private and social rates of return to investment in education across several dimensions: by education level, gender, sector of employment, nature of the secondary school curriculum and over time. The results show that, in most countries, the premium associated with higher education has decreased during the 1980s and that investment in primary education exhibits the highest rate of return among the levels considered.