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Returns to schooling, ability and cognitive skills in Pakistan
[working paper]
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 importan... view more
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.... view less
Keywords
competence; gender; income; Pakistan; returns on education; woman; cognitive ability; income effect; investment in education; academic achievement; gender-specific factors; labor market
Classification
Labor Market Research
Macroanalysis of the Education System, Economics of Education, Educational Policy
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