Abstract

Keywords

۱٫ Introduction

۲٫ Education expansion in Vietnam

۳٫ Literature review

۴٫ Data and methodology

۴٫۱٫ Data and variables

۴٫۲٫ Empirical analysis

۵٫ Results and discussions

۵٫۱٫ The effect of the number of years of education on labor market returns as higher education expands

۵٫۲٫ The effect of tertiary education on labor market returns as higher education expands

۶٫ Discussion

۷٫ Conclusion

Declaration of Competing Interest

References

Abstract

Expansion of education has effects on many aspects of society. There are debates around a possible change in the economic return to education as it expands and by that education may have become a positional good. This study uses Vietnam Household Living Standards Surveys (VHLSS) data over the period of 2002 to 2014 with a sample of 212,521 individuals to explore how educational expansion influences the strength of the relationship between education (its absolute and relative measures) and income. The instrument-free method was employed to minimize bias. Results suggest that as higher education expands, the effect of the absolute measure of the years of schooling on labor market outcomes does not differ, but the effect of its positional measure on these outcomes does. Likewise, as higher education expands, the effect of the absolute measure of higher education graduation on labor market outcomes does not vary, but the effect of its relative measure on these outcomes does. The findings support the positional theory of education, which predicts that the absolute level of education is not critical, but rather its level relative to that of other individuals.

۱٫ Introduction

Examining the economic return to education has been given much attention for many decades. This attention has been focused on understanding the extent to which each additional year of schooling affects earnings or the extent to which the different credentials affect earnings. There is an extensive literature on the topic, whether on developed countries or developing ones (Barone & Ortiz, 2011; Ortiz & Kucel, 2008; Peet, Günther & Wafaie, 2015). In the last decades, many countries have gone through a process of educational expansion, mainly at tertiary education. Though scarce, studies are recently interested in unpacking mechanisms through which the strength of the return to education varies along with the expansion of education at the societal level. This research agenda has produced mixed results that have led to a debate on the topic. Some researchers argue that the return to education decreases as education expands because education has the status of a scarce good, and reduction of scarcity reduces its premium (Van de Werfhorst, 2011a; Dickson & Smith, 2011).