Private Returns to Levels of Education in Turkey: Evidence from Panel Data

April 1, 2020 ยท 2 minutes read


Along with the emergence of the concept of human capital, there has been an increase in research on the economic contribution of education. One of the most important reasons to invest in education is wage differentials. But there are many direct and indirect, private and social contributions of education. Because of these reasons demand for education has been increasing. There are different stages of education from primary education to higher education and each education level has a different economic return. Therefore, the main purpose of this study is to investigate whether there is a positive relationship between education and wage income and whether the rate of return to education vary for different levels of education. This study uses Income and Living Conditions Survey Panel Dataset provided by the Turkish Statistical Institute covering from years 2008-2011 and 2012-2015 and employs panel econometric methods, considering the endogeneity problem, to estimate both private returns to education and each level of education. The study concludes that increases in educational level affect the income levels in the same direction but at different rates.


There is a common view of literature that increased education investments, as an important human capital determinant, have a positive and significant impact on wage income. Indeed, demanding education is highly connected with gaining higher income. As a result of this assumption, returns to education is high in most of countries as expected. The empirical findings obtained from this study support and contribute to the literature. Our empirical results suggest proposing that more resources should be allocated in higher education to form higher human capital investment. Based on the results of this study, there was a significant difference between the levels of education in general. With technological developments, knowledge and skills that individuals need to obtain are increasing while living conditions are changing.


  • Merve KURT
  • Erdal GUMUS

Private Return to Education


Close Terminal User Astronaut Download View preview Go get it GitHub Alternate GitHub Donate Learn more Menu Check Circle Researchgate Space Shuttle Steam Twitter angle-right Warning