The economic consequences of setting foot in a college in Colombia

Arbeitspapier

Using administrative data, I track the path of all the secondary school graduates in Colombia from 2002 to 2012 that enter higher education and/or the formal labor market (5.4 million graduates). I compare graduates within the same secondary school and cohorts to estimate the premium of higher education. I estimate the sheepskin effect by exploiting the phenomenum of students who enrolled in the labor market after finished 90% or more of the college course-work but did not graduate and comparing them against workers that did earn a bachelors degree. Using a modified Mincer equation, I find that the Colombian labor market values a college graduate at the time of graduation the same as a secondary school graduate with five years of formal labor market experience. I also find high positive correlations between the quality of higher education institutions and students' skills and earnings, and between on-time graduation and earnings. High-quality higher education institutions boost the entry-level salary for their graduates, but this boost fades over time as others gain experience and the graduates' skills as workers are revealed. I find evidence that higher education is slowly reducing the gender income gap and improving income distribution in Colombia. Finally, the sheepskin effect is about 12.6% on average and the returns for bachelors, diplomas, and masters are 15.1%, 33.6%, and 53.2%, respectively.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IAI Discussion Papers ; No. 250

Classification and Topics

• Classification: Wirtschaft ; Higher Education; Research Institutions ; Education and Inequality ; Returns to Education ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Wage Level and Structure; Wage Differentials
• Subject: Returns to education ; Sheepskin effect ; Higher Education ; Education ; Graduation ; Gradiation on time

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Herrera Prada, Luis Omar
• Event: Veröffentlichung
• (who): Georg-August-Universität Göttingen, Ibero-America Institute for Economic Research (IAI)
• (where): Göttingen
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/226344
• Last update: 10.03.2025, 11:42 AM CET