
George PsacharopoulosGeorgetown University | GU · Walsh School of Foreign Service
George Psacharopoulos
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Introduction
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Publications
Publications (233)
In the 60-plus year history of returns to investment in education estimates, there have been several compilations in the literature. This paper updates Psacharopoulos and Patrinos and reviews the latest trends and patterns based on 1120 estimates in 139 countries from 1950 to 2014. The private average global return to a year of schooling is 9% a ye...
The purpose of this chapter is to provide an overview of the rates of return to investment in higher education based on existing data, incorporating where possible a differentiation for socio-economic background. The chapter discusses the shortcomings of the methods and data available. The size and pattern of the returns to higher education are put...
Progress in educational development in the world since 1900 has been slow and uneven between countries. Providing basic education for all children in developing countries has been and remains an unmet challenge of governments and international organizations alike. This is in sharp contrast to recent findings in the economics literature on the catal...
The empirical returns to schooling literature has proven to be a useful standard. The global average rate of return to schooling, estimated at 10%, is used as a global benchmark. Empirical evidence on returns on investment in education is a useful indicator of the productivity of education, and it serves as an incentive for individuals to invest in...
1. For a discussion of the changing female labor force participation rate at different stages of economic development, see Collver and Langlois (1962).
2. Based on NSSG (1980), 15.
3. See Aigner and Cain (1977).
4. Of course one should not interpret the one percentage point fall in the gross earning ratio as a deterioration of the economic position...
A 1977 sample of 6,112 male and 2,644 female employees in Greece is used to quantify the relationship between family background, ability, education, occupation, and earnings. Alternative path models fitted to the data give results as follows: education has a strong direct and indirect effect on earnings. Compared to education, ability and family ba...
Adverse macroeconomic conditions and keen intersectoral competition for public funds have reduced the ability of LDC governments to continue expanding education. This article discusses three broad policy options which address the current crisis in education: recovering the public cost of higher education and reallocating government spending toward...
The present paper starts by discussing the principles of public funding of universities. The size of the social returns to investment in education gives an indication regarding the most efficient use of resources, while the difference between the private and the social rates relates to issues of equity. The available evidence is contrasted to highe...
During the last decade empirical estimates have become available of the yield of educational capital in a number of countries. In this article the meaning of the phrase ‘rate of return to investment in higher education’ is explained and then the relevant evidence in twenty five countries is reviewed. A distinction is drawn between the returns enjoy...
Vocational education and training (VOCED) continues to be a favored instrument of social engineering for achieving a series of objectives, such as accelerating economic growth, reducing youth unemployment and benefiting from economic globalization. This is in spite of a great deal of scepticism regarding its effectiveness. The article examines the...
Incl. bibl., abstract This article presents a broad overview of human capital theory and presents highlights of the most recent evidence on the private and social returns to education. A distinction is made between the narrow social returns, as traditionally estimated in the economics of education literature, and the wide social returns that includ...
Based on the author's over two decades of association with the World Bank, this paper reviews the institution's policies and practice on education. It describes why education policy, as revealed by operations, shifted dramatically since the early Bank projects on education and identifies the reasons for such a shift. The paper argues that the multi...
On average, poverty and income inequality increased in Latin America during the 1980s. Forty-six percent of the increase in poverty took place in the cities of Brazil alone, though part of this reflects the migration of poor rural inhabitants to urban areas. There is strong evidence that both income inequality and poverty mirrored the economic cycl...
Using a sample of over 3000 first year university entrants in Greece, we investigate the time and expense incurred in preparation for the highly competitive higher education entry examinations, as well as what students spend privately while attending university. It is shown that in a constitutionally “free for all” higher education country, familie...
The paper examines the way the national higher education entry examinations in Greece are used to determine entry into the 100 percent government- controlled state tertiary education system. The database refers to the population of all secondary education graduates taking (or not taking) the June 2000 national secondary school examination. There is...
Returns to investment in education based on human capital theory have been estimated since the late 1950s. In the 40-plus year history of estimates of returns to investment in education, there have been several reviews of the empirical results in attempts to establish patterns. Many more estimates from a wide variety of countries, including over-ti...
Incl. bibl. Higher Education in Developing Countries: Peril and Promise (hereafter referred to as the Task Force Report) is perhaps the most wide-ranging discussion of issues facing higher education in developing countries in many decades. The Task Force Report shows considerable independence. It supports the involvement of the private sector in hi...
Peer Reviewed http://deepblue.lib.umich.edu/bitstream/2027.42/42835/1/10734_2004_Article_BF00153995.pdf
Article 16 of the Greek Constitution stipulates that higher education is provided free in state institutions, and that private universities are prohibited. The paper digs into the historical origins of such provisions and discusses the reasons why, in spite of national outcry, the article has survived with no revision since it first appeared severa...
Returns to investment in education based on human capital theory have been estimated since the late 1950s. In the 40-plus year history of estimates of returns to investment in education, there have been several reviews of the empirical results in attempts to establish patterns. Many more estimates from a wide variety of countries, including over ti...
Empirical tests of the popular screening hypothesis in the economics of
education have typically used years of schooling or completed educational
cycles referring to educational levels in general, such as secondary
education or university. The screening test on a special sample of tertiary
technological institutes graduates of Greece against a cont...
This article provides a pot pourri of issues and themes related to education in Europe and examines how the 'economics of education' may contribute to understand and, it is to be hoped, solve a particular social problem that prima facia may appear to be in the education domain. The level of exposition is such as to be accessible to educationists, w...
We investigate the degree to which there is a trade-off between child labour and human capital formation using time-log data of children from a Tanzanian household survey. We find that a tradeoff between hours of work and study exists, and hours of work tend to be more affected by social conditions than hours of study. Hours of work are negatively...
The paper presents a cost-benefit analysis of a higher education project in Mauritius by using the rate of return and net present value methods, from the individual student and society's point of view. Although there exists a very rich literature on cost-benefit analysis of an education sector as a whole, we are not aware of published estimates at...
The paper uses data from the 1993-94 household survey to investigate a number of issues stemming from the current educational policy debate in Greece. Private and social returns to investment in education are estimated and a test of the screening hypothesis is conducted. No evidence was found that higher education is being used as a screening devic...
What is the private rate of return to schooling and to on-the-job training? And how far does human capital explain the inequality of earnings? We try to answer these questions for Britain for a random sample of about 7000 employed males. Basically, we use the framework of Mincer (1974), but at some important points we find this unsatisfactory, and...
The productive role of education has been questioned before, but is now under unusually heavy attack from the ‘screening hypothesis.’ If true, this hypothesis has quite devastating implications for educational policy and research. Broadly, it says that the earnings differentials associated with education do not mainly reflect improvements in indivi...
The paper addresses the issue of child labor in relation to the educational attainment of working children. The empirical
analysis is based on household surveys in Bolivia and Venezuela. It was found that labor force participation is non-trivial
among those below the legal working age or supposed to be in school. Working children contribute signifi...
This paper analyzes the effects of being indigenous, number of siblings, sibling activities and sibling age structure on
child schooling progress and child non-school activity. The analysis is based on the Peru 1991 Living Standards Survey. The
analysis shows that family size is important. However, the analysis also demonstrates the importance of t...
Investment in education is critical for economic growth and poverty alleviation. Such investment is typically being financed by the state. Yet in many countries families contribute privately to the education of their children. In an era of stagnating public budgets for education (and practically anything else), the private financing of education ga...
This report presents an update of poverty and income distribution statistics in Latin America and the Caribbean and examines the trends in these statistics during the 1980s. The document also provides a series of nonmonetary social indicators to help complete the profile of living conditions in the region. Latin America has historically exhibited a...
This paper uses data from the 1988 Family Expenditure Survey to estimate and analyze the private expenditure on education in Greece. Such expenditure amounts to 111,624 million drs per year or 2.1% of total household expenditure. The aggregate expenditure of households is roughly half of what the state is spending on education. The dominant type of...
This paper examines the relative roles of the private and public sectors in the implementation of a two track strategy to reduce poverty. This is composed of sustained broad-based economic growth that makes efficient use of labor, the main asset owned by the poor, and investment in people or human resources by ensuring access to basic social servic...
This paper uses data from three household surveys in 1984, 1989 and 1992 to investigate the relationship between earnings and education in Mexico. The time series feature of the data allows us to assess how the returns to education behave in a country that experiences macro-economic ups and downs. The results indicate that the returns to an investm...
The paper presents a systematic taxonomy of research areas in the economics of education and gives a number of key topics that deserve more research attention in the future. Emphasis is put on documenting the unit cost of education at different schooling levels and curriculum types, along with the learning and earning outcomes of education. Evidenc...
The international financial crisis manifests itself in Ireland not only as a crisis of the banking system, but also as a major fiscal crisis, aggravated by years of soft revenue policy and a housing bubble that has burst spectacularly. The severe drop in economic output results in a crisis of employment and a definitive end to the ‘Celtic Tiger’ er...
The paper attempts to clarify the many issues and critiques that have been raised on the occasion of the World Bank's 1995 Education Sector Review, using the example of a country official having to decide how to allocate a new influx of resources to education. It is argued that, pending future scientific developments, human capital theory and estim...
In this paper, after reviewing the literature on school progress — particularly age-grade distortion (over-age) and grade repetition — in developing countries, a series of factors that relate to age-grade distortion are examined using household survey data from Bolivia and Guatemala. A model is developed to estimate the incidence and determinants o...
This paper reports on the problems faced by the teaching profession in Greece based on a survey of those in training. Nearly 50% of the primary school teachers in the country are waiting to be employed. Teachers' salaries are significantly lower than salaries in other occupations, including construction work. There is dissatisfaction in the teachin...
The nature of performance criteria and the timing of evaluation are crucial determinants of the relevance and accuracy of findings for education and training systems. The author proposes specific indicators adapted to different evaluation situations and stresses the importance of conducting ex ante and impact rather than just input evaluations.
This article discusses the role and significance of comparative evaluation for improving education and training. It stresses that sound policy decisions require increasingly quantitative, as opposed to purely qualitative, measures of educational performance. These must, however be built on valid comparisons: so inter-country statistics should be in...
In this paper, the schooling attainment and labor characteristics of those aged 12-19 years is assessed using data from the 1990 household survey from Paraguay. Although schooling is compulsory to age 13, it was found that 28% of those 12 years of age are already out of school. Among those out of school, 19% work formally in the labor market and co...
This paper reviews the basic concept of the profitability of investment in education and enumerates the various techniques that have been used in the literature to estimate the rate of return to investment in education. The various estimating techniques are illustrated by using household survey data from Venezuela and Guatemala. The paper also revi...
One measure of the health of the Social Security system is the difference between the market value of the trust fund and the present value of benefits accrued to date. How should present values be computed for this calculation in light of future uncertainties? We think it is important to use market value. Since claims on accrued benefits are not cu...
The Philippines is a country in which phenomenal educational expansion has taken place in the last 30 years. As such, it is a natural case for testing the hypothesis that investment in education is no longer economically valid. In this paper we provide new estimates of the returns to investment in education in that country for 1988. The findings in...
The analysis presented in this paper, the first for Paraguay, uses data from the 1990 Household Survey to analyze the relationship between education and earnings, and to calculate rates of return to investment in education at different levels. The results are consistent with what has been found in other countries with similar socioeconomic characte...
The paper provides a comprehensive update of the profitability of investment in education at a global scale. The rate of return patterns established in earlier reviews are upheld: namely, that primary education continues to be the number one investment priority in developing countries; the returns decline by the level of schooling and the country's...
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 l...
The study uses economic methods in an attempt to document the socioeconomic situation of the estimated 34 million indigenous people in Latin America (8% of the region's population). The results confirm that indigenous people are a seriously disadvantaged group, and in areas such as education, even worse off than expected. But the results also show...
Longitudinal data on 366 Greek higher education candidates are used to explore relationship between internal (school average) and external (entrance examinations) marks. Marks of last three grades of secondary school seem to reflect fairly well how student will perform in external examinations. Questions of access to education and tests as deterren...
One measure of the health of the Social Security system is the difference between the market value of the trust fund and the present value of benefits accrued to date. How should present values be computed for this calculation in light of future uncertainties? We think it is important to use market value. Since claims on accrued benefits are not cu...
It is well known that indigenous peoples worldwide are in an inferior economic and social position vis-a-vis the non-indigenous, or "mainstream', population. In this paper, individual data from a large-scale, household survey conducted in Bolivia in 1989 are used to examine educational attainment and earnings differentials, and to estimate the diff...
This article uses data from a sample of 4,000 workers in Bogota in 1988 to investigate how several indicators of educational quality affect labor market outcomes. Educational quality is measured by using a variety of proxies at each level of education, such as grade repetition in primary school, the score of the university entrance examination obta...
Data from household surveys of 12 Latin American countries were used to assess how teachers'salaries compare with those of workers in other occupations. The results show that salaries vary among countries, ranging from an apparent 35 percent underpayment in Bolivia (compared with the contol group) to a 65 percent overypayment in Colombia. But when...
The paper uses time-series (1977–1990) and cross sectional (states) data on a number of educational development and cost indicators in Mexico to answer the question on how schooling has been affected during the economic downturn of the 1980s. The results show that, in spite of severe cuts in budgetary allocations to education (mainly in terms of lo...
The authors use household survey data for 18 Latin American countries to assess earnings differentials by level of education, and to assess how these differentials changed in the 1980s. Introducing the cost of education allows them to estimate private and social rates of return on investments on education across several dimensions: by gender, by le...
Household survey data for II Latin American countries are used to assess earnings differentials by type of secondary education during the late 1980s. Introduction of the cost of the curriculum allows for the estimation of private and social rates of return to investment in education by type of secondary school curriculum. The paper documents mixed...
Indigenous groups are often associated with poverty and so are low levels of education. Guatemala and Bolivia are the two Latin American countries in which the ethnic part of the population is proportionately greatest, with Bolivia being more schooled than Guatemala. So the author tried to determine how levels of ethnicity and education affect the...
After reviewing the literature on repetition (students repeating grades in schools) in developing countries, the authors examine factors related to repetition in Bolivia and Guatemala. They develop a model to estimate the incidence and determinants of repetition. The use multivariate logistic regression analysis to estimate the determinants of repe...
In the mid 1980s, half of Colombia's rural schools did not offer complete primary education and more than half of rural children between the ages of 7 and 9 had never attended school. Unitary schools - multigrade classrooms taught by one teacher - were established in the early 1960s in isolated rural areas with few students. However, when efforts w...
Using historical census data and the latest household surveys, the authors investigate changes in female employment in Latin America, the factors that determine women's participation in the labor force, and the reasons for the gap between men's and women's earnings. The authors find, to their surprise, that despite worsened economic conditions sinc...
This article contributes to the exploration of the earnings-education-ability nexus by using data from a Colombia sample of about 2100 workers. The results lean on the side of strong support for education as a determinant of earnings. The positive role of education on individual earnings is upheld when controlling for ability. Another important con...
There are several conclusions stemming from the above analysis of earnings and education among different types of male workers in Colombia and over time comparisons of the returns to education. Firest, the non-competitiveness of LDC labour markets regarding the earnings-productivity debate might have been exaggerated. Second, the issue of selectivi...
The paper uses data from a sample of 4000 workers in Bogota in 1988 to investigate the economic payoff to training. The results show that training indeed has an impact on workers' earnings. However, a strong positive interaction was found between training and the years of formal schooling of the worker - the payoff to training increases with the le...
Incl. index, bibliographical references. The study is in 2 vols. but we only have Vol.1
The paper uses data from the 1980 Brazilian census to analyse the sources of earnings variation among males with emphasis on the role of education, labor market segmentation, geographic location and sector of economic activity. The results indicate a sizeable private rate of return to investment in education across labor market “segments”, especial...
The paper uses data from the 1987 Household Survey to analyze the determinants of educational attainment among those aged from 10 to 18. Two-thirds of the children in the sample are still in school, and 12% of those who have left school are illiterate. Two percent of the sample have never attended school and 42% have repeated at least one school gr...
The paper discusses a number of theoretical reasons why vocational-technical education may fail to achieve its intended objectives and illustrates the case by using data from nine countries at different stages of economic development. The arguments relate to the sociology of occupational choice, technological change and the economics of educational...
Every country in the world has attempted, one time or another, to improve the fit between education and work. None has really succeeded in doing so. The paper first discusses the theoretical reasons why the matching of education to jobs is a utopia. It then suggests a series of measures that, although will never result to a perfect fit between educ...
The paper uses data from the 1987 Household Survey to update the returns to education and compare them to those available for 1975 and 1984. The results indicate that the returns to education have been largely maintained despite the educational explosion that took place in Venezuela during the 12 year period under investigation. Higher education is...
Revised version of a paper presented at the ILO workshop. This article is followed by a "rejoinder" to Cláudio de Moura Castro's comments in the same issue
The paper uses data from the 1987 Household Survey to expore the relationship between education and earnings in Ecuador. The results indicate that there is a sharp difference in the premium associated with higher education between males and females (in favor of males), a result consistent with sex discrimination at the higher end of the occupationa...
No state budget in any country will be able to satisfy in the future the exploding social demand for education. Therefore, resources for educational expansion will have to be provided increasingly from private sources. The limited state resources for education will have to be targeted mainly to activities associated with efficiency, equity and exte...
This paper reviews a number of educational policy statements in East African countries, on issues ranging from combining education with production at the primary level to the financing of higher education. An assessment is made as to how successful the policies have been in achieving their original intention. The paper's conclusion is that policy o...