Education’s Resilience: Assessing Returns to Education in Cambodia through the Lens of the COVID-19 Pandemic

This study investigates the economic returns to education in Cambodia before and during the COVID-19 pandemic using pooled cross-sectional data from the Cambodia Socio-Economic Surveys 2019-2021. It examines how additional years of schooling impact individual wages and analyzes how returns to education fluctuate over time and by gender. Ordinary Least Squares (OLS) is used as the baseline estimation method, followed by Two-Stage Least Squares (2SLS) to address potential endogeneity, with the 2014 district-level Grade 12 first-attempt pass rate serving as the instrumental variable. The results show that education consistently yields positive and statistically significant returns, with OLS estimates indicating a 5% increase in wages per additional year of schooling. 2SLS estimates suggest a sharp rise in returns during the pandemic, reaching up to 20% in 2021, highlighting the protective role of education in maintaining labor market stability. The findings also reveal gender disparities: men generally earn higher returns than women, with women's returns becoming significant only in the later stages of the pandemic. These findings underscore the critical role of education in protecting earnings during economic shocks and highlight the need for inclusive educational and labor market policies to support equitable recovery in Cambodia.