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Contents Introduction

This paper examines the consequences that Thailand’s 1997 Þnancial crisis had on the labor market, using microdata from Bangkok, and focuses on changes in the returns to schooling and labor-market experience for migrants. Returns to schooling and labor -market experience are estimated in both the pre and postcrisis periods. Empirical evidence clearly demonstrates the evidence that, while returns to schooling remained constant (robust) throughout these periods, the returns to labor-market experience dropped in the postcrisis period. The returns to labormarket experience decreased due to the obsolescence of experience accumulated before the crisis. As a result, the complementarity of schooling and experience became weak after the crisis. These results imply that investments in education not only increase the earnings of the poor but also enhance resistance to external shocks and that long-term returns to labor-market experience will rise at a rate comparable to returns to education, if labor markets are stable.