The economic return to vocatiónal high schools in Chile

Abstract

This paper estimates the economic returns to vocational secondary education in Chile. Using administrative data we link individual salaries in 2010 (ages 24 to 27) with the type of secondary educaÜon each person attended in 2001. Adopting a generalized Roy model with local supply variables as exclusion variables, we identify the causal effect of attending vocational education on salaries. We report positive return to vocational education. Specifically, our estimated treatment on the treated is USD $232 per month. In addition, we estímate the effect of a policy that increases the local supply of vocational education. Our results show that those induced to attend vocational education as a result of this policy would face a return of USD $180.6 per month. Finally, we consider the different categories of vocationaleducation. We report significant and positive returns for four of the five categories of vocational education in Chile, with returns ranging between USD $114 and USD $447 per month.These results have important consequences for the design of educational policies in the region. Vocational secondary schools might represent the best alternatives for many talented high school students.