Measuring Returns to Education: The Case of Latvia

Abstract

This paper aims to measure returns to education in Latvia and place them in context of data available in other countries. The goals of this paper are to review the literature on returns to education, highlighting the measurement challenges, and, based on the 2011 labour market survey data, estimate private returns to education in Latvia overall as well as by individual characteristics. The main findings are that returns to education in Latvia are close to the European Union average, but lower than in some emerging markets e.g. Lithuania, and that there are statistically significant differences in returns to education depending on a person’s gender, ethnicity, field of employment and location.