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The purpose of this study is to empirically investigate gender differences in the returns to different levels of education and studying in STEM fields in Mexico. Specifically, we estimate the effects of education on employment and income.

We use data about more than 4.5 m individuals in the year 2020 in Mexico to estimate the average treatment effects of different levels of education and studying in STEM fields on income and employment. To obtain these estimates, we apply several econometric models that address non-random selection into employment and different levels of education.

The results of the analysis suggest that, on average, women experience negative returns to STEM education, both in terms of income and employment probability. In contrast, studying in STEM field has positive effect on the income of men. Additionally, in terms of income, women have higher returns to secondary, vocational and bachelor’s levels of education, while men have greater returns from a master’s degree.

Our findings suggest that changes in the labor market are essential to create an equitable environment for women pursuing STEM education. Addressing discrimination in the labor market and ensuring fair hiring practices will not only enhance the effectiveness of the labor market itself but also contribute to reducing inequality in the education system. Particularly, the issue of small or even negative returns to STEM education for women – both in terms of incomes and probability of employment – should be addressed.

We provide novel estimates that characterize gender disparities in the returns to education in Mexico. Specifically, we contribute to previous studies on Mexico by examining different levels of higher education and studying in STEM fields. Particularly, our estimates contribute to the explanation of gender inequality in obtaining STEM education.

Education system stimulates the development of human capital and provides informative signaling allowing to differentiate productivity of individuals. If education system is efficient then higher levels of education usually associated with greater returns on labor market. To evaluate the efficiency of Russian education system we aim to estimate the effect of vocational education and different levels of higher education on wages.

We use data on 8,764 individuals in the years 2019–2021. Our statistical approach addresses two critical issues: nonrandom selection into employment and the endogeneity of education choice. To tackle these problems, we employed Heckman’s method and its extension that is a structural model which addresses the issue of self-selection into different levels of education.

The results of the analysis suggest that there is a significant heterogeneity in the returns to different levels of education. First, higher education, in general, offers substantial wage premiums when compared to vocational education. Specifically, individuals with specialist’s and bachelor’s degrees enjoy higher wage premiums of approximately 23.59–24.04% and 16.43–16.49%, respectively, compared to those with vocational education. Furthermore, we observe a significant dis-parity in returns among the various levels of higher education. Master’s degree provides a substantial wage premium in comparison to both bachelor’s (19.79–20.96%) and specialist’s (12.64–13.41%) degrees. Moreover, specialist degree offers a 7.16–7.55% higher wage premium than bachelor’s degree.

We identify a hierarchical pattern in the returns associated with different levels of higher education in Russia, specifically “bachelor-specialist-master.” These findings indicate that each level of education in Russia serves as a distinct signal in the labor market, facilitating employers' ability to differentiate between workers. From a policy perspective, our results suggest the potential benefits of offering opportunities to transition from specialist’s to master’s degrees on a tuition-free basis. Such a policy may enhance access to advanced education and potentially lead to higher returns for individuals in the labor market.

There are many studies on returns to higher education in Russia. However, just few of them estimate the returns to different levels of higher education. Also, these studies usually do not address the issue of the endogeneity arising because of self-selection into different levels of education. Our structural econometric model allows addressing for this issue and provides consistent estimates of returns to different levels of education under the assumption that individuals with higher propensity to education obtain higher levels of education.