Returns to human capital: schooling, reading literacy, and socio-emotional skills

• In Event: Fifty years of comparative studies of educational returns: a panel in honor of Martin Carnoy and George Psacharopoulos

Abstract

This paper extends the analysis of the returns to education including cognitive skills and socio emotional skills for nine developing countries, taking advantage of the Skills toward Employment and Productivity (STEP) surveys implemented by the World Bank from 2011 to 2013. This paper contributes to the literature in two ways. First, it exploits internationally standardized data on cognitive skills (reading writing and numeracy), personality and behaviors, and job-relevant skills. Second, it provides estimates that are comparable with similar large-scale surveys carried out in OECD countries. The results indicate significant returns to schooling in a range of 5 percent to 10 percent, which are similar to estimates found in developed countries. Furthermore, cognitive, socio-emotional and job-relevant skills correlate with higher wages, beyond a worker’s schooling. However, the significance and magnitude of effects varies by country.

Author

• Alexandria Valerio, The World Bank