EDUCATION AND EARNINGS IN PAKISTAN
By Zafar Mueen Nasir and Hina Nazli∗
I. Introduction: The conventional theory of human capital developed by Becker (1962) and Mincer (1974) views education and training as the major sources of human capital accumulation that, in turn, have direct and positive effect on individuals’ life time earnings. In the Mincerian earning function, the coefficient of school years indicates the returns to education, i.e., how much addition in earnings takes place with an additional school year. There exists a wide range of literature that estimated the rates of returns to education for different countries [Pascharapoulos (1980; 1985; and 1994); Pascharapoulos and Chu Ng (1992)]1. In Pakistan, most of the nationally representative household surveys do not contain information on variables, such as, completed years of schooling, age starting school, literacy and numeracy skills, quality of schooling, and technical training. Due to the unavailability of completed school years, one can neither compute the potential experience nor observe the effect of an additional year of schooling on individual earnings. Therefore, the available literature in Pakistan is lacking in estimating the returns to education by using the Mincerian earning function2. In recent years, the government of Pakistan has started nation-wide survey, Pakistan Integrated Household Survey (PIHS), to address the imbalances in the social sector. This survey
The authors are Senior Research Economist and Research Economist at the Pakistan Institute of Development Economics (PIDE) Islamabad. 1 Pascharapoulos (1994) provide a comprehensive update of the estimated rates of returns to education at a global scale. He observed high social and private profitability of primary education (18%and 9% respectively) in all regions of world. The private rate of returns at this level were found highest in Asia (39%) as compared to other regions. He also noted a considerable increase in total earnings by an additional year of education in all regions of world; 13% in Sub-Saharan Africa; 10% in Asia; 12% in Europe/Middle East/North Africa; and 12% in Latin America/Caribbean. 2 At national level, only two studies are available in Pakistan that used the Mincerian earning function approach to examine the returns to education [see Shabbir and Khan (1991) and Shabbir (1994)]. However, both these studies are based on twenty years old data set.
provides rich information on the above mentioned variables that were missing in the earlier household surveys. This study uses the data of PIHS to examine the returns to education by using Mincerian earning function and thus aims to fill the vacuum that, due to the lack of appropriate data, exists in the literature on returns to education in Pakistan. In this paper we will first estimate the earning function with continuous school years with the assumption of uniform rate of returns for all school years. It is argued that different school years impart different skills therefore we extend our analysis to examine the addition in earning associated with extra years of schooling at different levels of education, i.e., how much increase in earnings takes place with an extra year of schooling at different levels, such as, primary, middle, matric, intermediate, bachelors and masters. By doing so we overcome the problem that exists in the available literature in Pakistan. To our knowledge no study has yet adopted this method to examine the returns to education in Pakistan3. The impact of technical training and school quality on the earnings of fixed salaried and wage earners will be examined in this study. Based on the available data in Pakistan, most of the studies, for example, Haque (1977), Hamdani (1977), Guisinger et al (1984), Khan and Irfan (1985), Ahmad, et al (1991); and Ashraf and Ashraf (1993a, 1993b, and 1996) estimated the earning functions by defining the dummy variables for different levels of...
Education in the U.S. today is mostly paid for and administered by government bodies. This has been the way American education has worked since education began to become widespread. The bottom line rationale and purpose behind having a widespread system of education is that:
“A stable and democratic society is impossible without widespread acceptance of some common set of values and without a minimum degree of literacy and knowledge on the part of most citizens.” (Friedman, 1955)
There are many more arguments than this; however, this sums it up best by saying that widespread and common education is necessary for society to function.
This widespread form of government education has worked for years. But, it has been found in recent years that “Whatever the reason, the fact of deterioration of elementary and secondary schools is not disputable.” (Friedman, 1997, p. 342). American levels of education have begun to lag behind those of schooling systems in other nations despite a much higher level of investment in per-pupil spending for the U.S.. (Ladd, 2002, p. 12-13)
Since there has been this failure in the current system of education, some sort of reform is necessary. The policy proposed in this paper to fix the flawed educational system is one that closely follows...
...age, many of us were told that education is the key to one’s success in our life. Study hard! Do your homework! Do assessment books! Get good grades! Do more assessment books! Get first in class! Go to university! Education is our only foundation, our only future! By making education available to all, everyone has an equal opportunity to succeed in life (Jones 2012) .
In Singapore, the education system is aim to help students to discover their own talents, to make the best of these talents and realize their full potential, and to develop a passion for learning that lasts through life (Ministry of Education n.d.). The system also identifies and groom bright young students for positions of leadership. The system also stress on academic performance in grading students and granting them admission to special programs and universities. Academic grades are considered as objective measures of the student’s ability and effort, regardless of their social background. Having good academic qualifications is seen as the most important factor for the students’ career prospects in the job market, and their future economic status (Ng 2011).
Education is important and has multiple objectives and the relative meaning of each of these objectives can be very individual. The various importances are a result of the various economic, social, spiritual, cultural,...
...Name: Cindy Mou
Instructor’s Name: Tomasz Michalak
Date: June 16th, 2011
The relationship between the economic development and the prevalence of education
This research paper examines the relationship between the economic development and the prevalence of education. Also, the correlation between the two will be discussed. The main goal of this paper is to identify whether a country’seconomic growth increases the widespread of its education or not. Furthermore, the changes in universal literacy will be analyzed in relations to the reinforcement on economic advancement. Following this main question, this paper will also deliberate on whether or not an economic prosperous country will allocate more funds in education. Thus, as a family’s wealth increases, parents would be more likely to invest more money in educating the next generation. Through this research, increasing the prevalence of education indeed brings a tremendous amount of benefits to the personal financial growth, yet not national economic growth. Unexpectedly, econometric tests invalidate the correlation between education and economic growth. More expenditure in educational funds does not mean more economic growth for a nation. Nevertheless, economic development...
...INDIA'S GROWTH THROUGH ADVANCEMENT IN EDUCATION SECTOR
*Research scholar,sri Venkateshwara university,gajraula
**Supervisor, Maharaja agarsen college,Delhi university.
Education in India today is nothing like it was in Pre-Independence and Post-Independence Era. Education System in India today went through a lot of changes before it emerged in its present form. Presenteducation system in India is also guided by different objectives and goals as compared to earlier time. Present system of education in India, however is based around the policies of yesteryears. After independence, it was on 29th August 1947, that a Department of Education under the Ministry of Human Resource Development was set up. At that time the mission was the quantitative spread of education facilities. After, 1960’s the efforts were more focussed to provide qualitative education facilities. The present research focus on steps through which our indian education system had gone through. The basic moto of this research is to show that india has done serious efforts in education nd has shotremendous development but it is still lacking in comparison with developed nations. This study is an effort to suggest some measures for its improvement.
Education in every sense is one of...
Student number: 20134571
Science 1 in the Early Years
Assessment: Item 1- Views of teaching and promoting science of young learners
The pedagogy of play can be hard to understand and part of the reason for this is it’s so difficult to explain how children learn by play because play isn’t simply; it is complex. Each child begins their early childhood education with a set of skills and prior knowledge that is influenced by their family, culture and past experiences (Fellows &Oakley, 2010). The past knowledge should become the foundation for developing an understanding of scientific concepts (Duschl, Schweingruber & Shouse, 2007). Children are naturally inquisitive, creative and aware of the world around them (Campbell & Jobling, 2012). Play is an important development tool and an effective way to teach children scientific concepts while using their prior knowledge (Preston, Mules, Baker & Frost, 2007). Learning science through play shows children that science is useful and enjoyable and is a significant aspect of the real world (Bulunuz, 2013). This essay will review teaching science through play, theorists who support play and the way in which the Australian curriculum and EYLF support play pedagogy.
Science and Play
Play pedagogy is a context for learning through which children organise and make sense of their social worlds, as they engage actively with people, objects and representations. Research shows...
...If you look in to our economy you see that education plays a major factor. Education is one the key factors of being successful. Not only does the individual gain an advantage from having an education, but its economy also benefits. For the individual, their benefits would lay in basically the quality of life having economy returns the favor of having an education with a sustained and satisfying job, hypothetically speaking. For the economy, the potential benefits lie in economic growth and the increase of shared values that support bringing the economy together socially. Depending on the individual and how far there willing to continue their education, depends where you will be financially wise, in the future.
Troubles of a High School dropout What is a High School dropout? A high school dropout could be a student who was enrolled in school during the previous school year and for whatever reason chose not to enroll at the beginning of the current school year. Another example of a drop out would be a student that has not graduated from high school or finished a state or district-approved education program.
Reasons why students become High School Dropouts Students who choose to drop out of school have many different reasons. Some that may seem ?good at the time? and then there are others that may not, depending on the student and their situation. Rationale reasons of why...
...Female Education and Economic Growth Case Study Of India
Economic growth in India
India is classified as a lower middle income country, and since 2011 is no longer regarded as a developing country (World Bank Database, 2012) due to recent high economic growth (Kohli,
2006). In 2010, the country had a real GDP growth of 8.8 percent and a nominal GDP per capita of
1410.3 dollars (World Bank Database, 2012). According to AT Kearney, an International consulting group (Rao & Varghese, 2009), India is ranked as one of the best countries to start a new business in. The foreign investment rate, might be a proof of that. The ministry of finance in India believes it will reach almost 40 percent of the GDP by 2013. Not only the foreign investments have increased but the domestic savings and investments has also gone up and were about 30 percent of the GDP in
2009 (Rao & Varghese, 2009). The ratio of poor people6 has decreased from 45.3 percent to 29.8
percent between year 2000 and 2010 (World Bank Database, 2012).
Even if poverty has decreased one third of the population is still thought to be poor (World Bank Database, 2012). Poverty negatively affects the opportunity for many to be able to enroll in school negatively. The state has a major role to mass educate the population and increase human capital (Duraisamy, 2001). One of the most important ways to do that is to reduce the fertility rate. It is...
...Education and economic development
The analysis of education as an economic commodity has a long history. The seminal work of Becker (1962) and Schultz(1962) presented a formal model of education as an investment good that augmented the stock of human capital. Individuals made educational choices in the same way as any other investment decision all of which have the common characteristic that an investment cost paid now produces a flow of benefits through time whose present discounted value is to be compared with the present cost. Following from this, there was an outpouring of econometric studies attempting to measure the rate of return to education – the so called Mincerian approach – whilst controlling for a plethora of other variables that might reasonably be expected to influence earnings. Extensions of this basic Human Capital model to study training outcomes, educational subsidies and fee charges have been recently exploited. Within development and growth economics, the importance of education as an economic variable also has a distinguished history beginning with Lewis(1962). Questions regarding appropriate mix of skills, what type of education to be emphasised, the relationship between education and the capacity of the economy to absorb educated workers in productive employment have all been studied albeit...