Changing Returns to Education in Taiwan: 1978-91

Changes in rates of return to education in the process of development are of importance in determining the impact of educational expansion on earnings inequality. Falling rates of return for more highly educated workers can counteract the pressure of educational expansion to cause an increase in earnings inequality. A study found that private rates of return in Taiwan are highest for higher education levels and lowest for lower education levels and that private returns are higher for women than men at all education levels. The role of changing rates of return to education in Taiwan could be of interest to other developing countries that want to replicate the Taiwanese experience of educational expansion, rapid economic growth, and decreasing income inequality.