Evolution of Education Premiums in Cambodia: 1997–2007

This paper evaluates education premiums in Cambodia over the past decade using data from the 1997, 2003–2004 and 2007 Socio‐economic Surveys of Households. The Cambodian labor market has undergone a transformation over the past decade. In 1997, the earnings of workers employed for wages exhibited limited association with education and skills. The picture was dramatically different by 2003 and more so by 2007. The profitability of education had increased sharply, especially for women. There is evidence that the human capital model is now applicable to both men and women, resulting in a wider distribution of earnings. Instrumental variables estimates of the return to an additional year of schooling for male wage earners are found to be higher than the corresponding OLS estimates, but only in the private sector.