Comparison of the returns of education for colombia and Turkey: A quantile regression analysis (2008-2017)

Education has become the main engine of economic growth in nations and there is a consensus among economists about the role of education in the modern labor market. Therefore, increasing levels of education and improving the quality of education are issues with profound economic implications, which not only condition the future performance of societies but will determine that of future generations' numbers in the labor market. This study analyzes the change in education returns in different points of the wage distribution in Colombia and Turkey for the period 2008-2017. We focus on these two emerging countries, which are characterized by a sustained expansion of higher education. The theory of human capital and criticisms of it are mainly examined. The estimates are based on the Mincer wage equation but using quantile regression techniques to see variations between returns to education for different wage levels. The data are taken for Colombia from the Great Integrated Household Survey (GEIH) and for Turkey from the TurkStat Household Labor Force Survey (HİA). Although the returns have similar behavior patterns, the magnitudes and variability differ among the quantiles analyzed. In Turkey, education coefficients increase steadily between percentiles 1 and 80 then become much more homogenous for the last 20 percentiles, while for Colombia in the first 15 percentiles returns are homogeneous and then between percentiles 15 and 100 the returns increase steadily, which implies much more inequality in the upper part of the distribution. The results suggest that the returns to education are higher for Colombia than for Turkey, it is also found that for both countries the returns of education have fallen from a maximum level attained in 2008 to 2017.