Education and the labor market in Uruguay

Abstract This paper uses data from the 1989 Uruguayan Household Survey to investigate the relationship between earnings and education in that country. Mincerian earnings functions fitted to nearly 10.000 workers reveal that each extra year of schooling yields a private rate of return of 9.2 per cent. which is comparable to the returns observed in the more industrialized countries. Among the other findings of the study: females realize a full percentage point advantage over males on the return to their educational investment while private sector employees enjoy a nearly five percentage point advantage over public sector employees — a finding that highlights the recognition of the productive value of education by industry. When the full cost of education (both public and private) is considered and education is broken down by level of schooling, primary education exhibits the highest rate of return-nearly double that of secondary education — whereas graduates of technical/vocational schools and teacher training courses enjoy only minor returns on this type of investment.