Does It Still Pay to Go to College in Egypt? Decomposition Analysis of Wage Differentials for College and Non-College Graduates

This paper analyzes the educational wage differentials among youth graduates in Egypt using a nationally representative data set extracted from some labor market surveys. We follow the empirical framework of Mincer's estimation of the simple schooling model, extending the model by adding additional control variables. On average, college graduate are found to earn more hourly wages than their non-college counterparts. The educational attainment wage gap is found to be not uniform across youth earners' wage distribution. Using newly developed methods, we decompose the educational wage differentials among youth graduates into endowment effects, explained by differences in productivity characteristics, and discrimination effects attributable to unequal returns to covariates. We find that discrimination effects contribute more significantly to the educational wage gap than endowment effects throughout the wage distribution