Rojas, DiegoLederman, Daniel2015-01-072015-01-072014-12https://hdl.handle.net/10986/21138This paper builds on previous studies to uncover evidence suggesting that cyclical fluctuations in returns to schooling are determined by fluctuations in foreign demand, which tend to be positively correlated with returns to schooling. The effect of export fluctuations (driven by changes in foreign demand) seems to be attenuated by labor market rigidities, such as constraints on employers to hire temporary workers on an hourly basis. This evidence suggests that countries that have flexible labor markets and experience volatility in their external demand might also experience volatility in returns to schooling. The paper discusses why this might be a concern for developing countries.en-USCC BY 3.0 IGOACCOUNTINGAGGREGATE UNEMPLOYMENTATTRITIONAVERAGE WAGEBILATERAL TRADEBUSINESS CYCLEBUSINESS CYCLESCAPITAL FLOWSCAPITAL INVESTMENTSCOLLECTIVE AGREEMENTSCONSUMER PRICE INDEXCOUNTRY FIXED EFFECTSCOUNTRY TO COUNTRYCRISESDEBTDEPOSITDEPOSIT RATEDEPOSIT RATESDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPING ECONOMIESDEVELOPMENT POLICYDOMESTIC CREDITDOMESTIC INTEREST RATESDRIVERSDUMMY VARIABLEDUMMY VARIABLESECONOMETRIC MODELSECONOMETRICSECONOMIC BOOMECONOMIC FLUCTUATIONSECONOMIC RESEARCHECONOMIC STATISTICSECONOMIC VOLATILITYECONOMICS LITERATUREECONOMICS OF EDUCATIONEDUCATIONAL ATTAINMENTEDUCATIONAL LEVELEMPLOYMENTEXPORTSEXPOSUREFINANCIAL MARKETSFINANCIAL SHOCKFINANCIAL SHOCKSFIRM LEVELFLEXIBLE LABOR MARKETSFOREIGN DEBTGDPGLOBALIZATIONHOURLY WAGEHOUSEHOLD SURVEYSHUMAN CAPITALHUMAN RESOURCESINCOMEINCOME DISTRIBUTIONINCOME INEQUALITYINCOME VOLATILITYINFLATIONINFORMAL SECTORINFORMATION SYSTEMINSTRUMENTINTEREST RATEINTEREST RATESINTERNATIONAL BANKINTERNATIONAL LABOUR ORGANIZATIONINTERNATIONAL TRADEJOB EXPERIENCEJOBSLABOR DEMANDLABOR ECONOMICSLABOR MARKETLABOR MARKET FLEXIBILITYLABOR MARKET RIGIDITIESLABOR MARKET RIGIDITYLABOR MARKETSLABOR SUPPLYLABOURLENDING INTEREST RATELONG-TERM COSTSMACROECONOMIC CRISESMALE WORKERSMARKET INDEXESMINIMUM WAGEMONETARY FUNDNATIONAL INCOMEOCCUPATIONSOUTPUTOUTSOURCINGPENSIONPOLITICAL ECONOMYPRELIMINARY EVIDENCEPRELIMINARY RESULTSPREVIOUS STUDIESPRIVATE SECTORPUBLIC POLICYRATE OF RETURNRATES OF RETURNRATES OF RETURNSREAL WAGESREGIONAL TRADEREGIONAL UNEMPLOYMENTRETIREMENTRETIREMENT AGERETURNSSALARIED WORKERSSKILL PREMIUMSKILL PREMIUMSSKILLED LABORSTABLE JOBTECHNOLOGICAL CHANGETEMPORARY WORKERSTRADE LIBERALIZATIONTRADE POLICYTRADE REFORMSTRADINGTRUST FUNDTURNOVERUNEMPLOYEDUNEMPLOYED WORKERSUNEMPLOYMENTUNEMPLOYMENT RATEUNEMPLOYMENT RATESUNSKILLED LABORUNSKILLED WORKERSWAGE DIFFERENTIALWAGE DIFFERENTIALSWAGE GAPWAGE INEQUALITYWAGE PREMIUMWEALTHWORKERWORKING HOURSWTOYOUNG WORKERS10.1596/1813-9450-7144