Gender differentials in returns to education in developing countries

Barnardt, Ignatius; Jush, Golschan Khun; Wollesen, Thies; Hayden, Samuel; Sotosek, Eva

Gender differentials in returns to education in developing countries

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Barnardt, I, Jush, G, Wollesen, T, Hayden, S, Sotosek, E. Gender differentials in returns to education in developing countries. 2017. handle: http://hdl.handle.net/10230/33542

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Abstract

We investigate a possible gender gap in returns to education using data from the World Bank’ STEP program for seven developing and emerging countries. We control for cognitive skills, non-cognitive skills and parental education - previously unobserved due to unavailability of data - to investigate how this heterogeneity is playing a role in estimating the gender differential in educational returns. We also model selection using the Heckman two-step estimation procedure to examine whether selection may be driving this phenomenon. Our findings suggest that gender gaps in returns to education are not as prominent in the countries in our sample as previously suggested. We also find that controlling for unobserved heterogeneity on the one hand, and selection on the other, has different effects in different countries, highlighting the importance of understanding individual countries’ labour markets in detail before drawing conclusions regarding the existence of a gender gap in returns to education.