households, and public versus private workers. These are provided in Online Appendix Figures 1

and 2, and Tables III to VI.

6.4 Quality of Schooling

Differences in labor outcomes for indigenous and non-indigenous individuals may also be

explained by differences in the quality of schooling. Indigenous individuals with secondary

education may not be offered formal employment if the quality of their education is lower than

secondary education for non-indigenous groups. If the quality of secondary schooling in districts

with indigenous individuals is manifestly poorer, then returns to education would be different for

graduates from these schools.

Detailed historical data on the quality of schooling for secondary-educated Peruvians is not

available. However, provincial level data on education expenditures and student-teacher ratios

from FONCODES for the year 1999 is available. Data were obtained for the year 1999, the only

year for which district level data is available. Previous research has established a positive

connection between school resources and student performance (Holmlund, McNally and Viarengo

2010; Haeheland, Rauum and Salvanes 2012).

Table X presents the baseline regression for each quartile of district education spending

per student. 27 The results demonstrate that the differences in the returns to secondary education

are large and statistically significant for the bottom three quartiles of district spending per student.

The difference in returns to secondary education is largest for the 1 st quartile, experiencing the


The data on district education expenditures is from 1999, while the data on number of students

in a district is from 2001. No data on district-level expenditures after 1999 is available.


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