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There is an extensive empirical literature on returns to education that focuses both on developed and developing countries. Available literatures in developing countries compare the returns to academic education and vocational education [Nasir and Nazil (2000)], or seek to identify the impact of completing a given schooling cycle on earnings [Appleton (2001)]. The aim of this study is to contribute the literature by conducting a systematic analysis on returns to education and education inequality in Pakistan. In particular it asks to what extent inequality for different level of education vary across the wage distribution. In order to address simultaneously the two issue of return to education and education inequality, study adopt a quantile regression framework. A characteristic of the wage and salary structure of most countries is that people with more education tend to receive higher remuneration than those with less [Colclough (1982)]. To do so, the paper has used data drawn from Labour Force Surveys, conducted by Government of Pakistan for the time period between 1990 and 2003, which contains eight different surveys, using methodology developed by Agrist, et al. (2006), where weighted least squares interpretation of Quantile Regression is used to derive an omitted variables bias formula and a partial quantile regression concept, similar to the relationship between partial regression and OLS. Estimation uses personal and household characteristics, occupational and employment characteristics in order to assess the education inequality. Empirical estimates indicate that education inequality is much higher for the middle level educates compare to educate that has less education or high level education and qualifications. The education level coefficients decrease when different sets of exogenous variables are introduced in the estimation equation. Analysis also suggests the existence of the education inequality across different areas and regions and over the time it has increased.

A framework for analysis of the components of private & soc returns to educ, & their interrelationships. Specifying that because of interaction phenomena, total returns will differ from the sum of individual returns, we may set up the identity: S' + S' = A' + A' + D' + D', where S refers to true soc returns, A is the sum of private returns, D is the discrepancy between S & A, & (') & (') refer, respectively, to monetary & non-monetary components of returns. It is shown that while the value of D' will normally be positive in the long term, in a dynamic society (as educ as a whole expands), presumptive discrepancies can be negative in an advanced industrial economy with strong demands for high-level skills. The components of A' are systematically presented, noting their possible negative, as well as positive, aspects. Taking interactive factors into account, the weight of the presumptions is found to be toward a positive S', but not necessarily a positive D'. AA.

This paper estimates the marginal returns to college for individuals induced to enroll in college by different marginal policy changes. The recent instrumental variables literature seeks to estimate this parameter, but in general it does so only under strong assumptions that are tested and found wanting. We show how to utilize economic theory and local instrumental variables estimators to estimate the effect of marginal policy changes. Our empirical analysis shows that returns are higher for individuals more likely to attend college. We contrast the returns to well-defined marginal policy changes with IV estimates of the return to schooling. Some marginal policy changes inducing students into college produce very low returns.

The economic returns to education in transition countries have been extensively evaluated in the literature. The present study contributes to this literature by estimating the returns to education in Georgia during the last transition period 2000-04. We find very low returns to education in Georgia and little evidence of an increasing trend in the returns. This picture contrasts with somewhat higher rates of return to education in the mid-1990s in Georgia and the recent estimates from other transition countries. A further analysis of the shifts in the supply and demand for education sheds light on possible causes. In particular, on the supply side, the decline in the quality of education in the 1990s has negated the improvements in the provision of skills needed by market economies during this period. On the demand side, the expansion of the Georgian economy has taken place in the direction of fields such as public administration and education that employ a highly educated workforce but do not remunerate well. Yet it would be a mistake to conclude that education is not a valuable asset in Georgia. The role of education is largely manifested in its impact on the employability of individuals, an issue that has been overlooked in the transition literature. Once this impact is taken into account, education is shown to play an increasingly important role in influencing the earnings of the working population in Georgia. The paper uses the ordinary least squares approach, instrumental variables approach, and sample selection correction, taking into account conditional and unconditional marginal effects of education on earnings.

This paper estimates marginal returns to college for individuals induced to enroll in college by different marginal policy changes. The recent instrumental variables literature seeks to estimate this parameter, but in general it does so only under strong assumptions that are tested and found wanting. We show how to utilize economic theory and local instrumental variables estimators to estimate the effect of marginal policy changes. Our empirical analysis shows that returns are higher for individuals with values of unobservables that make them more likely to attend college. We contrast our estimates with IV estimates of the return to schooling. JEL: I23, J24, J31