Jhon J. Mora

Universidad Icesi, Profesor Titular Departamento de Economía, Cali, Colombia 

E-mail: jjmora@icesi.edu.co

ORCID 0000-0002-9974-1874

Returns to human capital in a developing country: A pseudo-panel approach for Colombia

Diana Y. Herrera

Universidad Icesi, Departamento de Economía. Cali, Colombia 

E-mail: diana.herrera1@u.icesi.edu.co

ORCID 0000-0001-5110-0683

Juan F. Álvarez

Universidad Icesi, Departamento de Economía. Cali, Colombia 

E-mail: jfalvarec@icloud.com

ORCID 0000-0002-4290-023X

Jose S. Arroyo

Universidad del Valle,

Cali, Colombia

E-mail: santiago.arroyo@correounivalle.edu.co

ORCID 0000-0002-2581-6298

Abstract. This article analyzes the recent returns to human capital in Colombia. Using a pseudo-panel approach, the results show a human capital return of 9.7% from 2016 to 2020. Comparisons with previous data show a reduction of approximately 5 p.p. in return on human capital. Our results show the importance of investing in Colombia’s human capital due to the positive externalities compared to other forms of investment in Colombia. Also, we find statistically significant differences between men and women; Around 2 percentage points (p.p.). A more effective public policy is needed to correct these disparities, despite Colombia's public policies such as equal pay for equal work or advances in equal parental leave.

Received: January, 2022

1st Revision: August, 2022

Accepted: February, 2023

DOI: 10.14254/2071-789X.2023/16-1/4

JEL Classification: I26, J24, C21, J16

Keywords: returns to education, human capital, repeated cross-sectional models, selection bias, wages differences by sex