IDEAS home Printed from https://ideas.repec.org/p/boc/bocoec/819.html
   My bibliography  Save this paper

Returns to education in India

Author

Listed:
  • Scott Fulford

    (Boston College)

Abstract

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.

Suggested Citation

  • Scott Fulford, 2012. "Returns to education in India," Boston College Working Papers in Economics 819, Boston College Department of Economics.
  • Handle: RePEc:boc:bocoec:819
    as

    Download full text from publisher

    File URL: http://fmwww.bc.edu/EC-P/wp819.pdf
    File Function: main text
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Panagariya, Arvind, 2011. "India: The Emerging Giant," OUP Catalogue, Oxford University Press, number 9780199751563.
    2. Azam, Mehtabul, 2012. "Changes in Wage Structure in Urban India, 1983–2004: A Quantile Regression Decomposition," World Development, Elsevier, vol. 40(6), pages 1135-1150.
    3. 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 931-953, September.
    4. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 705-746.
    5. Lanjouw, Peter & Ravallion, Martin, 1995. "Poverty and Household Size," Economic Journal, Royal Economic Society, vol. 105(433), pages 1415-1434, November.
    6. Esther Duflo, 2001. "Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment," American Economic Review, American Economic Association, vol. 91(4), pages 795-813, September.
    7. Moffitt, Robert, 1993. "Identification and estimation of dynamic models with a time series of repeated cross-sections," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 99-123, September.
    8. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    9. Puja Vasudeva Dutta, 2004. "The Structure of Wages in India, 1983-1999," PRUS Working Papers 25, Poverty Research Unit at Sussex, University of Sussex.
    10. Daniel Cohen & Marcelo Soto, 2007. "Growth and human capital: good data, good results," Journal of Economic Growth, Springer, vol. 12(1), pages 51-76, March.
    11. Duraisamy, P., 2002. "Changes in returns to education in India, 1983-94: by gender, age-cohort and location," Economics of Education Review, Elsevier, vol. 21(6), pages 609-622, December.
    12. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
    13. Adriana Lleras-Muney, 2005. "The Relationship Between Education and Adult Mortality in the United States," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 189-221.
    14. David M. Cutler & Adriana Lleras-Muney, 2006. "Education and Health: Evaluating Theories and Evidence," NBER Working Papers 12352, National Bureau of Economic Research, Inc.
    15. Dreze, Jean & Srinivasan, P. V., 1997. "Widowhood and poverty in rural India: Some inferences from household survey data," Journal of Development Economics, Elsevier, vol. 54(2), pages 217-234, December.
    16. Temple, Jonathan R. W., 2001. "Generalizations that aren't? Evidence on education and growth," European Economic Review, Elsevier, vol. 45(4-6), pages 905-918, May.
    17. George Psacharopoulos & Harry Anthony Patrinos, 2004. "Returns to investment in education: a further update," Education Economics, Taylor & Francis Journals, vol. 12(2), pages 111-134.
    18. Kijima, Yoko, 2006. "Why did wage inequality increase? Evidence from urban India 1983-99," Journal of Development Economics, Elsevier, vol. 81(1), pages 97-117, October.
    19. Fulford, Scott L., 2013. "The effects of financial development in the short and long run: Theory and evidence from India," Journal of Development Economics, Elsevier, vol. 104(C), pages 56-72.
    20. Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
    21. World Bank, 2012. "World Development Report 2012," World Bank Publications, The World Bank, number 4391, March.
    22. Scott Fulford, 2010. "The effects of financial development in the short and long run," Boston College Working Papers in Economics 741, Boston College Department of Economics, revised 31 May 2011.
    23. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
    24. Cain, J. Salcedo & Hasan, Rana & Magsombol, Rhoda & Tandon, Ajay, 2010. "Accounting for Inequality in India: Evidence from Household Expenditures," World Development, Elsevier, vol. 38(3), pages 282-297, March.
    25. repec:pri:rpdevs:deaton_prices_poverty_india is not listed on IDEAS
    26. Angus Deaton & Valerie Kozel, 2005. "Data and Dogma: The Great Indian Poverty Debate," World Bank Research Observer, World Bank Group, vol. 20(2), pages 177-199.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Deininger, Klaus & Xia, Fang & Jin, Songqing & Nagarajan, Hari K., 2014. "Inheritance law reform, empowerment, and human capital accumulation : second-generation effects from India," Policy Research Working Paper Series 7086, The World Bank.
    2. Gille, Véronique, 2015. "Distribution of human capital and income: An empirical study on Indian States," Journal of Macroeconomics, Elsevier, vol. 43(C), pages 239-256.

    More about this item

    Keywords

    education; India; household consumption; school quality;

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • I2 - Health, Education, and Welfare - - Education

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:boc:bocoec:819. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F Baum). General contact details of provider: http://edirc.repec.org/data/debocus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.