Returns to quantity and quality schooling in SIDS in the context of vulnerability

Abstract

This study investigates the differential private returns to education quantity (mean years of schooling) and quality (Learning-Adjusted Years of Schooling, LAYS) in Small Island Developing States (SIDS) within a pooled OLS framework, leveraging World Bank data for 2017, 2018, and 2020. Recognizing that SIDS face unique vulnerabilities and resource constraints that impact their educational systems, the analysis incorporates measures of economic and structural vulnerability to isolate the distinct wage effects of schooling quantity versus quality. Results indicate that LAYS exhibits significantly higher returns than mean years of schooling, underscoring the importance of learning outcomes in driving labour market success. The findings align with recent evidence that highlights the limitations of merely increasing school enrolment without addressing the quality of education, and it emphasises the need for policy interventions that bridge the schooling-learning gap. By explicitly accounting for SIDS’ vulnerabilities and demonstrating the higher returns to quality-adjusted education, this research provides crucial insights for policymakers seeking to optimise scarce resources and enhance human capital development in these uniquely challenged economies.