Double penalty in returns to education: informality and educational mismatch in the Colombian labour market

Available from: 
October 2013
Paper author(s): 
Paula Herrera-Idarraga (University of Barcelona)
Enrique Lopez-Bazo (University of Barcelona)
Elisabet Motellon (Universitat Oberta de Catalunya)

This paper examines the returns to education taking into consideration the existence of educational mismatches in the formal and informal employment of a developing country. Results show that the returns of surplus, required and deficit years of schooling are different in the two sectors. Moreover, they suggest that these returns vary along the wage distribution, and that the pattern of variation differs for formal and informal workers. In particular, informal workers face not only lower returns to their education, but suffer a second penalty associated with educational mismatches that puts them at a greater disadvantage compare to their formal counterparts.


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Research section: 
Lacea 2013 annual meeting
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