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Who Gains More from Education? A Comparative Analysis of Business, Farm and Wage Workers in India

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  • Tushar Agrawal
  • Ankush Agrawal

Abstract

The economics literature on returns to education has focused largely on wage workers, thereby ignoring a sizable section of the workforce which is self-employed. This paper presents the estimates of private returns to education for business, farm and wage workers in India using a nationally representative household survey. The paper addresses the sample-selectivity issue arising due to endogenous sector allocation in the earnings equation using the multinomial-selection approach. Our results show that the average rate of return to education is higher for wage workers followed by business and farm workers. Focusing only on wage workers would provide an overestimate of returns by 30 per cent for business workers and by 40–50 per cent for farm workers. Further, the profile of returns across the education ladder varies perceptibly for the three type of workers with higher education being more rewarding for wage workers.

Suggested Citation

  • Tushar Agrawal & Ankush Agrawal, 2019. "Who Gains More from Education? A Comparative Analysis of Business, Farm and Wage Workers in India," Journal of Development Studies, Taylor & Francis Journals, vol. 55(6), pages 1081-1098, June.
    • Handle: RePEc:taf:jdevst:v:55:y:2019:i:6:p:1081-1098
    DOI: 10.1080/00220388.2018.1443209
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    Citations

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    Cited by:

    1. Sam Jones & Thomas Pave Sohnesen & Neda Trifkovic, 2023. "Educational expansion and shifting private returns to education: Evidence from Mozambique," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1407-1428, August.
    2. Shweta Bahl & Ajay Sharma, 2021. "Education–Occupation Mismatch and Dispersion in Returns to Education: Evidence from India," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 153(1), pages 251-298, January.
    3. Mohd. Imran Khan & Pallavi Wats & Jannet Jacob Farida, 2023. "Gender Differences in Returns to Self-employment in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 66(1), pages 239-266, March.
    4. K M, Siby, 2021. "Wage Earnings: Does Experience outweigh Education? Evidence from Ernakulam district of Kerala," MPRA Paper 107552, University Library of Munich, Germany.
    5. Shashwati Banerjee & Kishor Goswami, 2020. "Self-employed or Paid Employed: Who can Earn more among the Slum Dwellers and Why?," Progress in Development Studies, , vol. 20(1), pages 7-25, January.
    6. Sahoo, Soham & Klasen, Stephan, 2018. "Gender Segregation in Education and Its Implications for Labour Market Outcomes: Evidence from India," IZA Discussion Papers 11660, Institute of Labor Economics (IZA).
    7. Tushar Agrawal & Ankush Agrawal, 2023. "Beyond Consumption Expenditure: Income Inequality and Its Sources in India," Progress in Development Studies, , vol. 23(1), pages 7-27, January.
    8. Jain, Chandan & Kashyap, Shagun & Lahoti, Rahul & Sahoo, Soham, 2023. "The impact of educated leaders on economic development: Evidence from India," Journal of Comparative Economics, Elsevier, vol. 51(3), pages 1068-1093.

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