Jorge Rodríguez Osorio
University of Chicago
1126 East 59th Street
Chicago, Illinois 60637
NBER Working Papers and Publications
|February 2013||Heterogeneous Economic Returns to Postsecondary Degrees: Evidence from Chile|
with Loreto Reyes, Sergio S. Urzúa: w18817
We analyze the economic returns to different postsecondary degrees in Chile. We posit a schooling decision model with unobserved ability, observed test scores and labor market outcomes. We benefit from administrative records to carry out our empirical strategy. Our results show positive average returns to postsecondary degrees, especially for five-year degrees. However, we also uncover a large fraction of individuals with realized negative net returns. Although psychic benefits of postsecondary education could rationalize this result, we argue this might also suggest that individuals lack information at the time schooling decisions are made. Finally, our findings illustrate the importance of allowing for heterogeneous treatment effects when making policy recommendations.