DISCUSSION

repec.nep.lma

n?u=RePEc:iza:izadps:dp10389&r=lma

quality secondary schools. These differences in resources and quality are less pronounced in

primary and tertiary education.

7. Policy Implications

Our results suggest that secondary schools serving discriminated groups may require

additional resources and carefully targeted policies to help these groups overcome barriers to

finding formal employment. Boosting investments and quality in secondary education for the

indigenous is thus a policy recommendation stemming from our study.

We conduct a simple back-of-the-envelope calculation on the net wage returns to

secondary schooling for indigenous and non-indigenous individuals. In general, we control for the

same variables as in our main results, but measure the interaction terms on the outcome variable

of yearly income in local currency. 29 We calculate the net present value of the stream of future

income for primary and secondary education at different interest rates for each ethnicity. Then, we

calculate the net difference between the expected lifetime stream between secondary and primary

education for each group.

Figure 4 illustrates the different net returns to secondary education for indigenous and nonindigenous.

Non-indigenous workers find it beneficial to pursue secondary education until an

interest rate of 1.5 percent, at which point they would be better off foregoing secondary education.

In contrast, indigenous workers face wholly negative returns to secondary education at all interest

29

Income was self-reported on a monthly, bi-weekly, weekly and daily basis. Figures were

converted to yearly figures to minimize variation. Assumptions required for the calculations are

provided in Online Appendix Section A4.

26

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