Returns to schooling in Uruguay

Abstract

In this paper we analyze the economic returns to schooling in Uruguay. Instrumental variables are used to estimate mean and quantile regressions. An indicator of whether an Internet connection is available at home is used as an instrument for the years of schooling of the household head. The evidence shows that the simple Mincer OLS estimates are downward biased. When estimates are controlled for measurement error in schooling reports the results indicate that an additional year of schooling increases wage rates by 22 percent.returns to schooling, schooling premium