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Disability and Returns to Education in a Developing Country

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Author Info
Kamal Lamichhane (Research Center for Advanced Science and Technology (RCAST), The University of Tokyo)
Yasuyuki Sawada (Faculty of Economics, University of Tokyo)

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Abstract

In this paper, we estimate wage returns to investment in education for persons with disabilities in Nepal, using information on the timing of being impaired during school-age years as identifying instrumental variables for years of schooling. We employ unique data collected from persons with hearing, physical, and visual impairments as well as nationally representative survey data from the Nepal Living Standard Survey 2003/2004 (NLSS II). After controlling for endogeneity bias arising from schooling decisions as well as sample selection bias due to endogenous labor participation, the estimated rate of returns to education is very high among persons with disabilities, ranging from 19.4 to 33.2%. The coexistence of these high returns to education and limited years of schooling suggest that supply side constraints in education to accommodate persons with disabilities and/or there are credit market imperfections. Policies to eliminate these barriers will mitigate poverty among persons with disabilities, the largest minority group in the world.

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Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-645.

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Length: 29 pages
Date of creation: Aug 2009
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Handle: RePEc:tky:fseres:2009cf645

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