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Education, Labour Supply and Market Development in Rural Peru

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  • Sonia Laszlo

    (McGIll)

Abstract
This paper examines the channels through which education affects household earnings in environments where wages are unobserved. Utilizing data from rural Peru, the empirical strategy decomposes the earnings returns to education into various wage-dependent and labour supply parameters. Geographic variation of market development inherent in the Peruvian Andes assists in the identification of unobserved wages. Results indicate that education affects earnings disproportionately more than hours, implying strong wage effects of education. This paper provides evidence that education gives rural households access to better, more lucrative, jobs characterized by fewer hours. This effect is more pronounced in more developed market environments.

Suggested Citation

  • Sonia Laszlo, 2003. "Education, Labour Supply and Market Development in Rural Peru," Development and Comp Systems 0312005, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpdc:0312005
    Note: Type of Document - pdf; prepared on WinXP; to print on Dell Laser Printer p1500; pages: 44; figures: No
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    3. Chamberlin, Jordan & Jayne, T.S., 2013. "Unpacking the Meaning of ‘Market Access’: Evidence from Rural Kenya," World Development, Elsevier, vol. 41(C), pages 245-264.
    4. Diarra, Lacina & Dessy, Sylvain, 2018. "Land Tenure Security and Non-Agricultural Sector Employment: Household-level Evidence from Uganda," 2018 Annual Meeting, August 5-7, Washington, D.C. 274240, Agricultural and Applied Economics Association.
    5. Naeem ur Rehman, Khattak & Jangraiz, Khan & Muhammad, Tariq, 2012. "The Role of Education in Agricultural Productivity in Khyber Pakhtunkhwa(1975-2008)," MPRA Paper 51911, University Library of Munich, Germany, revised 2012.
    6. Kondo, M., 2018. "Schooling and Within-Sector Labor Productivity Outcome in Uganda: Joint Estimation of Returns to Education and Labor Supply," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277473, International Association of Agricultural Economists.
    7. Xia Tian & Yinying Cai & Qing Yang & Jin Xie, 2023. "How Do Heterogeneous Land Development Opportunities Affect Rural Household Nonfarm Employment: A Perspective of Spatial Regulation," Land, MDPI, vol. 12(4), pages 1-16, April.
    8. Wang, Ying & Zhang, Qi & Bilsborrow, Richard & Tao, Shiqi & Chen, Xiaodong & Sullivan-Wiley, Kira & Huang, Qingfeng & Li, Jiangfeng & Song, Conghe, 2020. "Effects of payments for ecosystem services programs in China on rural household labor allocation and land use: Identifying complex pathways," Land Use Policy, Elsevier, vol. 99(C).

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    More about this item

    Keywords

    Returns to Education; Time Allocation; Economic Development;
    All these keywords.

    JEL classification:

    • O - Economic Development, Innovation, Technological Change, and Growth
    • P - Political Economy and Comparative Economic Systems

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