Schooling Effects on Young Workers’wages: The Ecuadorian Case

por Sebastián Burgos-Dávila en 29/09/2014

Sebastián Burgos-Dávila
septiembre 29, 2014 | 2.272 Visitas |
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Serie Working Papers | CIC-Económica | 

Sebastián Burgos-Dávila
Nota Técnica 4
February, 2013 | Accepted for Publication: September, 2014

Abstract.- Differences in the levels of education of individuals determine asymmetries in the wages of workers. Skilled workers are in a better position in the labor market and higher levels of employment. Young workers are no exception, since the beginning of participation in the labor market differences in the years of schooling of individuals causes substantial wage gaps. In Ecuador, there is a marked difference in wages in different segments of the labor market, there is usually an important component of discrimination against women, indigenous, young workers and unskilled workers. Ecuadorian labor market is distinguished by an important share of underemployed population but an increasing share of fully employed population, according the national employement survey of December 2012, the fully employement rate was 44.9%, the underemployment rate was 51.3% and the unemployment rate was 4.1%3. Population between 23 and 29 years old faces better empleoyement situation with 51.5% of fully employement while average schooling for this group is 11 years nationwide. This short paper aims to determine which are the effects of schooling on wages of the population aged 23 to 29 years. By using the method of instrumental variables to correct the effects of endogeneity in the schooling of the individual, it is determined that for skilled workers there is a significant wage premium. The paper is organized as follows. Section two details the method of instrumental variables. Section three details the data and results, finally section four has the conclusions of this study.
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