Measuring the Effects of Schooling on Wages for a Young Sample from Rural Guatemala

Abstract

In order to measure the instinct effects of schooling on wages for adolescents and young adults from four villages in Rural Guatemala, this paper estimates different wage specifications that have been suggested in the human capital literature. Successively accounted for are potential sources of bias in the estimated coefficient of schooling, such as those arising from self-selectivity in the wage earning sample and from the omission of innate ability, family background, and the quality of schooling from the set of wage determinants. The results show that when these potential sources of bias are treated, the rate of return to schooling (inclusive of its cognitive and non-cognitive aspects) is about 5.9 percent for the population of adolescent and young adults in these villages.