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Education And Earnings In Pakistan

Listed author(s):
  • Zafar Mueen Nasir

    (Pakistan Institute of Development Economics (PIDE) Islamabad.)

  • Hina Nazli

    (Pakistan Institute of Development Economics (PIDE) Islamabad.)

This paper examines the role of education, technical training, school quality and literacy and numeracy skills on the earnings of wage earners and salaried persons in Pakistan by using the recent data of PIHS (1995-96). The analysis confirms the positive role of education as each year of education brings approximately 7 percent returns for wage earners. In addition, the effect of literacy and numeracy skills is observed to be large and significant. The returns are 15 percent higher for those who have all three skills as compared to those who do not possess any of these skills. The impact of technical training and private schools is found to be positive and significant. This paper draws three main policy implications. First, a large and significant impact of literacy and numeracy skills highlights the importance of basic learning skills that leads to higher wages in the labour market. This suggests the need of enhancing literacy and numeracy skills through formal as well as informal education. Second, a positive and significant association between earnings and higher level of technical training implies the urgent need of such institutions that can train individuals on modern lines in order to cope with the rapidly changing technology. And third, a large and significant coefficient of private schools highlights the importance of quality of education. The results suggests that more emphasis should be placed on market oriented approach in education. This requires the overhauling of public school system not only in terms of curriculum but also in teaching methods.

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Paper provided by Pakistan Institute of Development Economics in its series PIDE-Working Papers with number 2000:177.

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Length: 25 pages
Date of creation: 2000
Handle: RePEc:pid:wpaper:2000:177
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  1. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters,in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  2. Jimenez, Emmanuel*Lockheed, Marlaine E.*Luna, Ed, 1989. "School effects and costs for private and public schools in the Dominican Republic," Policy Research Working Paper Series 288, The World Bank.
  3. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, Enero-Jun.
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