Social returns to education in a developing country

Abstract

This paper estimates social returns to education in Turkey. Most evidence on spillovers from human capital comes mostly from developed countries, and estimates vary from country to country. The paper nds that social returns to education are around 3-4%, whereas private returns per year of education amount to 5% in Turkey. Moreover, the findings indicate that workers with lower skills, or working in sectors with lower average wages benet most from externalities. The results are robust to a series of checks, using a number of individual and regional controls, as well as instrumental variable estimation.