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Returns to Education: New Evidence for India, 1983--1999

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Author Info
Puja Vasudeva Dutta

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Abstract

This paper estimates the returns to education for adult male workers in regular and casual wage employment using Indian national survey data at three points in time spanning almost two decades. Both standard and augmented Mincerian wage equations are estimated using a set of human capital measures and other controls after addressing the issue of potential selection bias. This paper finds that the returns to education are significantly different for the two types of workers--while casual workers face at best flat returns to education, the returns to education for regular workers are positive and U-shaped with respect to education levels. There is also some evidence of a widening wage gap between regular workers with graduate and primary education that could possibly be a consequence of trade liberalization and other reforms pursued during the 1990s.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Education Economics.

Volume (Year): 14 (2006)
Issue (Month): 4 (December)
Pages: 431-451
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Handle: RePEc:taf:edecon:v:14:y:2006:i:4:p:431-451

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Related research
Keywords: Rate of return; human capital; India;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Jorge Saba Arbache & Andy Dickerson & Francis Green, 2004. "Trade Liberalisation and Wages in Developing Countries," Economic Journal, Royal Economic Society, vol. 114(493), pages F73-F96, 02. [Downloadable!] (restricted)
  2. Bennell, Paul, 1996. "Rates of return to education: Does the conventional pattern prevail in sub-Saharan Africa?," World Development, Elsevier, vol. 24(1), pages 183-199, January. [Downloadable!] (restricted)
  3. Newell, Andrew & Reilly, Barry, 1997. "Rates of Return to Educational Qualifications in the Transitional Economies," Discussion Papers in Economics 03/97, Department of Economics, University of Sussex. [Downloadable!]
  4. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March. [Downloadable!] (restricted)
  5. Wood, Adrian, 1997. "Openness and Wage Inequality in Developing Countries: The Latin American Challenge to East Asian Conventional Wisdom," World Bank Economic Review, Oxford University Press, vol. 11(1), pages 33-57, January.
  6. Kingdon, Geeta, 1996. "The Quality and Efficiency of Private and Public Education: A Case-Study of Urban India," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(1), pages 57-82, February.
  7. Murphy, Kevin M & Welch, Finis, 1990. "Empirical Age-Earnings Profiles," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 202-29, April. [Downloadable!] (restricted)
  8. Psacharopoulos, George & Patrinos, Harry Anthony, 2002. "Returns to investment in education : a further update," Policy Research Working Paper Series 2881, The World Bank. [Downloadable!]
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  9. Foster, Andrew D & Rosenzweig, Mark R, 1996. "Technical Change and Human-Capital Returns and Investments: Evidence from the Green Revolution," American Economic Review, American Economic Association, vol. 86(4), pages 931-53, September. [Downloadable!] (restricted)
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  10. Whitney Newey, 1999. "Two Step Series Estimation of Sample Selection Models," Working papers 99-04, Massachusetts Institute of Technology (MIT), Department of Economics.
  11. Geeta Gandhi Kingdon, Jeemol Unni, 2001. "Education and Women’s Labour Market Outcomes in India," Education Economics, Taylor and Francis Journals, vol. 9(2), pages 173-195, August. [Downloadable!] (restricted)
  12. Banerjee, Biswajit & Knight, J. B., 1985. "Caste discrimination in the Indian urban labour market," Journal of Development Economics, Elsevier, vol. 17(3), pages 277-307, April. [Downloadable!] (restricted)
  13. Puja Vasudeva Dutta, 2005. "Accounting for Wage Inequality in India," PRUS Working Papers 29, Poverty Research Unit at Sussex, University of Sussex. [Downloadable!]
  14. Sahn, David E. & Alderman, Harold, 1988. "The effects of human capital on wages, and the determinants of labor supply in a developing country," Journal of Development Economics, Elsevier, vol. 29(2), pages 157-183, September. [Downloadable!] (restricted)
  15. Psacharopoulos, George, 1993. "Returns to investment in education : a global update," Policy Research Working Paper Series 1067, The World Bank. [Downloadable!]
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  16. Behrman, Jere R & Birdsall, Nancy, 1983. "The Quality of Schooling: Quantity Alone is Misleading," American Economic Review, American Economic Association, vol. 73(5), pages 928-46, December. [Downloadable!] (restricted)
  17. Appleton, Simon & Hoddinott, John & Knight, John, 1996. "Primary Education as an Input into Post-primary Education: A Neglected Benefit," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(1), pages 211-19, February.
  18. Harrison, Ann & Hanson, Gordon, 1999. "Who gains from trade reform? Some remaining puzzles," Journal of Development Economics, Elsevier, vol. 59(1), pages 125-154, June. [Downloadable!] (restricted)
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  19. Geeta Gandhi Kingdon, 1997. "Does the Labour Market Explain Lower Female Schooling in India?," STICERD - Development Economics Papers 01, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Mehtabul Azam, 2008. "Changes in Wage Structure in Urban India, 1983-2004: A Quantile Regression Decomposition," Departmental Working Papers 0807, Southern Methodist University, Department of Economics. [Downloadable!]
    Other versions:
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