Changes in the returns to education in Costa Rica

I document patterns in the returns to education in Costa Rica from 1976 to 1992. The most important change during this period was that from the late 1970s to the mid-1980s, the return to education fell by about one-fourth, I construct demand and supply indices within a fixed manpower requirements framework to estimate demand and supply shifts. I find a significantly positive relationship between measures of demand for education and a significantly negative relationship between measures of supply for education. These findings suggest that calculations based on the returns to education, such as the returns to social investments in education, must take into account future changes in the returns to education as supply and demand conditions develop. (C) 1998 Elsevier Science B.V. All rights reserved, JEL classification: J31; O15.