Changes in the returns to education in Costa Rica

I document patterns in the returns to education in Costa Rica from 1976 to 1992. The most important change during this period was that from the late 1 970s to the mid-1980s, the return to education fell by about one-fourth, I construct demand and supply indices within a fixed manpower requirements fr amework to estimate demand and supply shifts. I find a significantly positi ve relationship between measures of demand for education and a significantl y negative relationship between measures of supply for education. These fin dings suggest that calculations based on the returns to education, such as the returns to social investments in education, must take into account futu re changes in the returns to education as supply and demand conditions deve lop. (C) 1998 Elsevier Science B.V. All rights reserved, JEL classification : J31; O15.