ESTIMATING THE PAYOFF TO SCHOOLING USING THE STANDARD MINCERIAN MODEL

Abstract: Estimating the Payoff to Schooling using the Standard Mincerian Model. Using data from Indonesia Family Life Survey (IFLS) wave IV, this paper empirically estimates the private rates of return to education in Indonesia. The result from ordinary least-squares estimate shows that one year of schooling increases an individual's earnings by 5.66 percent. Futhermore, Standard Mincerian Earnings function estimates reveal a gender asymmetry in private economic returns to schooling, with returns to women's education being substantially and statistically significantly higher than men's.