Education and its distributional impacts on living

Type Journal Article - Education Economics
Title Education and its distributional impacts on living
Volume 14
Issue 4
Publication (Day/Month/Year) 2009
Page numbers 431-451
This paper investigates the determinants of living standards (measured by per capita\nconsumption expenditure) at the household level, addressing heterogeneity in the impact\nof education and endogeneity of educational attainment. The estimation results obtained\nthrough an instrumental variables quantile regression suggest that the endogeneity of\neducation matters in determining the causal effect of education on living standards. On\nthe other hand, no evidence of heterogeneity in the percentage impact of education is\nfound. However, the results also provide evidence that the impact of other determinants\nvaries significantly over the outcome (expenditure) distribution, and consequently a\nsimulation based on the results shows that the level impact of education on consumption\nexpenditure differs substantially between the instrumental variables quantile regression\nand standard instrumental variables regression results. The comparison of the two shows\nthat the poverty alleviation impact of education estimated through the instrumental\nvariables quantile regression are much smaller than the impact estimated through the\nstandard instrumental variable regression.

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