Private and Social Returns to Investment in Education: the Case of Turkey with Alternative Methods

Abstract

This paper estimates private and social returns to investment in education in Turkey, using the 2017 Household Labour Force Survey (latest available at the time of writing) and alternative methodologies. The analysis uses the 1997 education reform of increasing compulsory education by three years as an instrument. This results in a private rate of return on the order of 16% for higher education and a social return of 10%. Using the number of children younger than age 15 in the household as an exclusion restriction, sample selection correction is applied, and it shows that the returns to education for females are higher than those for males. Contrary to many findings in other countries, private returns to those working in the public sector are higher than those in the private sector, and private returns to those who followed the vocational track in secondary education are higher than those in the general academic track. The paper discusses the policy implications of the findings.

Estimating the returns to education in a chronically depressed labour market: the case of Kosovo

“…To investigate further the returns to education in Kosovo we follow Patrinos et al ’s (2020) discounting method. As explained by Psacharopoulos (1995), to estimate the full discounting method one must have a sufficient number of observations in a given age-educational level cell for constructing “well-behaved” age-earnings profiles (i.e.…”

Does Vocational Education Pay Better, or Worse, than Academic Education?

“…Using Mincerian equation and census data from 1983 in Isreal, Neuman and Ziderman (1991) find that vocational education, when matched with occupation, relates to a 10% increase in earnings compared to academic education. Patrinos et al (2021) find that private returns to vocational secondary graduates are higher than those to academic graduates. Although studies on returns to education are abound, country-specific studies are essential and cannot be substituted (Psacharopoulos and Patrinos, 2018).…”

“…Using the 2017 Household Labour Force Survey in Turkey, Patrinos et al (2021) find that returns to academic upper secondary education pays better than vocational upper secondary education in Turkey, whereas Psacharopoulos and Patrinos (2018) find the opposite. Choi et al (2019) find that employers in one Vietnamese city appreciate work experience more than they do the level of education, whereas employers in a different city put higher weight on the level of education.…”

“…To better prepare the future graduates for the job market, a country's education system has to evolve accordingly. Vocational education thus plays a vital role in a country's education system (Tran, 2021;Patrinos et al, 2021).…”

A Practitioner’s Guide to Handling Irregularities Resulting from the 2014 Revisions to the Turkish Household Labor Force Survey

“…We also adopt a similar strategy to predict the unemployment statistics based on the criterion of searching for a job in the previous four weeks for the pre-2009 period. 1 For instance, researchers have used such surveys in Turkey to analyze female labor force participation (Dayioğlu and Kirdar 2010, Karaoglan andOkten 2015, Tunali et al 2019), the impact of immigration (Aydemir and Kirdar 2017a, Ceritoglu et al 2017, Akgündüz and Torun 2020, Araci et al 2021, the effect of education on earnings (Aydemir and Kirdar 2017b, Ozturk and Tumen 2018, and Patrinos et al 2020, determinants of educational attainment (Polat 2017, Caner et al 2019, Demirci and Poyraz 2021, and wage inequality (Bakis and Polat 2015). 2 There are two prominent examples of such revisions and how researchers handle each of them in the U.S. context.…”