Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229208
Authors: 
Korwatanasakul, Upalat
Year of Publication: 
2019
Series/Report no.: 
WIDER Working Paper No. 2019/105
Abstract: 
This paper estimates returns to schooling in Thailand, applying a regression discontinuity approach to the change in the compulsory schooling law in 1978. This law helped to enhance human capital investment on the eve of rapid structural transformation. The returns to schooling based on our instrumental variables estimation were around eight per cent, while ordinary least squares (OLS) overestimated such returns. Returns were higher in urban areas, service sectors, and underdeveloped northern regions. Our findings contrast sharply with recent studies exploiting similar institutional changes in developed countries, where OLS estimates underestimate returns to schooling, with the implication that former school dropouts tend to have higher returns than those who were already in school before the law changed. Ability bias is more likely to arise in developing countries, possibly because parents might be forced to keep only children with higher abilities in school, reinforcing inequality among children within the household.
Subjects: 
returns to education
Mincer equation
ability bias
regression discontinuity
Thailand
JEL: 
I20
I21
I25
I28
Persistent Identifier of the first edition: 
ISBN: 
978-92-9256-741-5
Document Type: 
Working Paper

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