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Returns to education in India

  • Scott Fulford

    (Boston College)

Despite the evidence for high returns to education at an individual level, large increases in education across the developing world have brought disappointing returns in aggregate. This paper shows that the same pattern holds in India by building aggregates from micro-data so that the comparability and quality issues that plague cross-country analyses are not a problem. In India both men and women with more education live in households with greater consumption per capita. Yet in aggregate, comparing across age cohorts and states, better educated male cohorts consume only about 4% more than less well educated ones. Better educated female cohorts do not live in households with higher consumption. This result is robust to: (1) using econometric models that account for survey measurement error, (2) different measures of household consumption and composition, (3) allowing returns to differ by state, and (4) age mismeasurement. Comparing state returns to a measure of school quality, it does not seem that poor quality is responsible for the low returns.

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Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 819.

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Date of creation: 31 Dec 2012
Date of revision:
Publication status: published, World Development, 2014, 59, 434-450
Handle: RePEc:boc:bocoec:819
Contact details of provider: Postal: Boston College, 140 Commonwealth Avenue, Chestnut Hill MA 02467 USA
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Web page: http://fmwww.bc.edu/EC/
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  1. Angus Deaton, 2003. "Prices and Poverty in India, 1987-2000," Working Papers 199, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
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