Returns to Investment in University Education - Economics Career at Continental University

• Published in: Research in world economy 2021-01, Vol.12 (1), p.166
• Main Authors: Loayza Acosta, Gustavo Ilich, Bernardo Reyes, Naisha Alyssa, Calle Arancibia, Margarita Elluz
• Format: Article
• Language: English
• ISSN: 1923-3981; 1923-399X
• DOI: 10.5430/rwe.v12n1p166

The present work analyzes the returns to the years of superior schooling of graduates of Economics Career at Continental University within the labor market of the region Junín of the period 2019. For this purpose, the returns to education are investigated under the normal assumptions of Mincer's equation, and later the incorporation of the instrumental variable: school of origin is proposed, in order to correct the problem of endogeneity. Finally, to correct the problem of selection bias, Heckman's technique is used: two-stage regression. This consists of first analyzing the probability of accessing the labor market in the Junín region in terms of variables such as: geographic location, school of origin, age, direct costs. Subsequently, analyzing the return to years of schooling. Likewise, it is important to specify that in the modeling of the probability a second regression is estimated incorporating the variable Academic Grade in order to be able to study the Sheepskin Effect. The results obtained showed that the return to years of schooling is 0.8%, which is not significant and is not corrected for Heckman's selection bias. We also have that the R2 is 10.11% which is very low for this type of cross-sectional data. This result is explained by the degree of rootedness of the graduates in staying in the Huancayo province and the low migration to other labor markets. In addition, this means that they do not have better working conditions that can be transformed into higher income.