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Heterogeneity in Returns to Education in India: A Quantile Regression Analysis

Author

Listed:
  • Aibanskhem Nongspung

    (St. Anthony’s College)

  • Veronica Pala

    (North-Eastern Hill University)

Abstract

This paper analyses returns to schooling in India using quantile regression with the data from the Periodic Labour Force Survey (PLFS) of 2017–18. The analysis is carried out for regular wage/salary earners, casual workers and self-employed persons. Quantile returns represent the wage differentials between individuals in the same education group but at different earnings quantiles. Average returns to education increase at higher levels of education for regular workers and self-employed persons. The effect of education on wages is smaller at lower quantiles and larger at higher quantiles. Thus education and ability are complementary in enhancing worker productivity and education increases earnings inequality. However, for casual workers, returns are higher for lower quantiles. Education tends to reduce earnings inequality for casual workers.

Suggested Citation

  • Aibanskhem Nongspung & Veronica Pala, 2025. "Heterogeneity in Returns to Education in India: A Quantile Regression Analysis," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 68(3), pages 983-1009, September.
    • Handle: RePEc:spr:ijlaec:v:68:y:2025:i:3:d:10.1007_s41027-025-00567-z
    DOI: 10.1007/s41027-025-00567-z
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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market

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