Estimating Returns to Education: Back to the Short-Cut

Estimates of the rate of return to investment in education have been the subject of an explosive literature in recent years papers. Most estimates come from the Mincerian earnings function. A less well-known method - the short-cut - offers an efficient means of quickly estimating returns with limited data. It has the added benefit of allowing for easy incorporation of public costs of schooling. Only needing grouped earnings by level of education the short-cut method the method is becoming popular again, especially in cases where lack detailed data, especially in developing countries.