What drives social returns to education? A meta-analysis

• Published in: World development Vol. 148; p. 105651
• Main Authors: Cui, Ying, Martins, Pedro S.
• Format: Journal Article
• Language: English
• Published: Oxford Elsevier Ltd 01.12.2021; Pergamon Press Inc
• Subjects: Bias; Convergence; Economic analysis; Economic development; Economic growth; Education; Education externalities; Externality; Meta-analysis; Returns to education; Spillover effect; C36; Education externalities; J31; I26; Returns to education; J24; I28
• ISSN: 0305-750X; 1873-5991
• DOI: 10.1016/j.worlddev.2021.105651

•A person’s productivity can benefit from the schooling of the people with whom that person interacts.•We study the drivers of these external effects by reviewing 32 studies that examine these effects.•We find that such schooling spillovers are significant but fall with the economic development of the country.•On the other hand, spillovers increase when schooling levels are more uneven across the population.•Spillovers are larger when considering co-workers in the same firm (as opposed to the same region or industry). Education can generate important externalities that contribute towards economic growth and convergence. In this paper, we study such externalities and their drivers by conducting the first meta-analysis of the social returns to education literature. We analyse over 1,000 estimates from 32 journal articles published since 1993, covering 15 countries of different levels of development. Our results indicate that: (1) there is publication bias (but not citation bias) in the literature; (2) spillovers slow down with economic development; (3) tertiary schooling and schooling dispersion increase spillovers; and (4) spillovers are smaller under fixed-effects and IV estimators but larger when measured at the firm level.