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Returns to schooling, ability and cognitive skills in Pakistan

[working paper]

Aslam, Monazza; Bari, Faisal; Kingdon, Geeta

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Please use the following Persistent Identifier (PID) to cite this document:http://nbn-resolving.de/urn:nbn:de:0168-ssoar-68738

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Corporate Editor University of Cambridge, Faculty of Education, Research Consortium on Educational Outcomes and Poverty (RECOUP)
Abstract This study investigates the economic outcomes of education for wage earners in Pakistan. This is done by analysing the relationship between schooling, cognitive skills and ability on the one hand, and economic activity, occupation, sectoral choice and earnings, on the other. In Pakistan, an important question remains largely unaddressed: what does the coefficient on 'schooling' in conventional earnings function estimates measure? While human capital theory holds that the economic return to an extra year of schooling measures productivity gains acquired through additional schooling, the credentialist view argues that it represents a return to acquired qualifications and credentials while a third, the signalling hypothesis, suggests that is captures a return to native ability. This paper seeks to adjudicate between these theories using data from a unique purpose-designed survey of more than 1000 households in Pakistan, collected in 2007. The paper also examines the shape of the education-earnings relationship in Pakistan as a way of testing the poverty reducing potential of education in Pakistan.
Keywords returns on education; academic achievement; competence; cognitive ability; Pakistan; income; gender-specific factors; income effect; investment in education; labor market; woman; gender
Classification Macroanalysis of the Education System, Economics of Education, Educational Policy; Labor Market Research
Method empirical
Free Keywords rates of return; schooling; ability; cognitive skills
Document language English
Publication Year 2008
City Cambridge
Page/Pages 35 p.
Series RECOUP Working Papers, 20
Status Published Version; reviewed
Licence Creative Commons - Attribution-Noncommercial-No Derivative Works