on the horizontal axis (see Figure 3). 18 The returns to education for primary and tertiary levels are

similar between non-indigenous and indigenous groups, supporting the third hypothesis. However,

a gap exists for secondary education, with indigenous groups (dashed line) obtaining fewer

benefits at this level relative to non-indigenous groups (solid line), supporting the first hypothesis.

Accordingly, Figure 3 resembles a combination of these hypotheses where the curves for

indigenous and non-indigenous are close to parallel for primary and tertiary education, but

different at secondary education.

5. Robustness Checks

5.1 Productive Informality

Table III illustrates the different effects of education using productive definitions of formal

employment for indigenous and non-indigenous individuals (Perry et al., 2007 and Gasparini and

Tornarolli, 2009). As before, the returns to education increase for higher levels of education and

remain statistically significant at the 1% level, although the magnitude of the standalone returns to

tertiary education (for non-indigenous and indigenous individuals) increases from 49 to 76

percentage points. Indigenous individuals with secondary education are 4.5 percentage points more

likely to be informal than comparably educated non-indigenous individuals. The difference in

returns to primary and tertiary education for indigenous individuals relative to non-indigenous


Note that Figure 3 plots all estimated coefficients and values, regardless of significance and

standard errors. Plotting only statistically significant coefficients illustrates a similar curve.


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