The pattern of economic rates of returns to investments in education helps us to understand the benefits of schooling. It was common knowledge that the returns to education are highest for the primary level of education and lower for subsequent levels. Recent evidence, however, suggests that the pattern has changed and that the returns to primary schooling are no longer the highest. Since the 1980s, the overall returns to schooling increased. Recently, the returns to higher education have increased the most. Possible reasons include technological change favouring higher-order skills; increasing coverage at lower levels of schooling; rising demand for credentials or the quality of schooling.

These issues are revisited in this chapter, which reviews patterns of current returns by level and region and discusses the possible causes of this change and the subsequent policy implications. Among other aspects, the education investment patterns over time are assessed. The analysis is based on estimates of the returns to schooling from more than 140 countries and more than 1,000 estimates from 1960 to 2015. The data come from countries all over the world representing more than 90 % of the world’s population and are disaggregated by gender.