In order to capture the relative measure of education, instead of using a traditional instrumental variable for policy, the number of years of education of individuals within each cohort combination is adjusted to be relative to the years of education that other individuals in the same cohort have. Specifically, the number of years of formal education of individuals in each cohort is recoded into a proportional score. In addition to the variables that measure education, i.e., the main the absolute and relative measures of education, because the paper is interested in how education expansion (which results in more individual in the labor market that have a university degree) influences the strength of the return to education, a variable capturing the percentage of individuals by cohort that have a university degree for each year is also used. This variable captures the degree of the expansion of higher education at the cohort level for each year. The study found that as higher education expands, the effect of the absolute measure of the years of education 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. These findings support the idea that the effect of relative educational position on labor market returns varies as education expands and increases the proportion of graduates in the labor market. 

 

Dr. Truong Thu Ha is one of the lecturers who delivere the first lesson of the “International Lecture Series” with the topic "ODA and FDI in VIETNAM: Legals, achievements and bottlenecks", organized by the Faculty of Economics and Development. The lecture series are held online and have attracted the participation of professors at prestigious universities in the US, Italy, Japan and lecturers of the Faculty of Development Economics, UEB.