Dataset for Educational Review

Using a meta-analysis of 70 primary studies and 257 returns to schooling estimates, this paper addresses the fundamental question of whether schooling still pays off, amidst a backdrop of intertwined global issues of stagnating school enrollment rates, high school graduates inundating gig job markets, doubts in whether the returns to schooling notion is still relevant, and disparities in the estimates even though they are supposed to be measuring the same concept. We address important questions on whether schooling still pays off, and the implications of estimating returns to schooling using education-based policies versus family background as instruments. Using Becker’s and Mincer’s seminal works as the theoretical basis, we fill the literature gap by examining the difference in returns to schooling estimates obtained through different types of instrumental variables, such as compulsory schooling laws and parents’ education. Our key findings indicate that policy interventions have stronger impact on schooling decisions than family background. Policy intervention instruments have a stronger impact on schooling than family background instruments; policies are more pivotal in influencing the amount of schooling, and subsequently, wages. That is, compared to family background, education-based policies most likely affect schooling decisions of those who would not have continued with schooling otherwise. Educational investments are still worthwhile for both governments and individuals. Due to the issues of wage-schooling causality and endogeneity of schooling decisions, our meta-analysis highlights the importance of not making any policy decisions based on naïve non-causal estimations of returns to schooling.