Returns to schooling in Bangladesh revisited: An instrumental variable quantile regression approach

Rahman, Mustafizur and Al-Hasan, Md. (2018): Returns to schooling in Bangladesh revisited: An instrumental variable quantile regression approach.

Abstract

The paper focuses on estimation of returns to schooling in the Bangladesh context. Earlier articles which tried to quantify the returns were constrained by a number of limitations including measurement techniques that were deployed. The present article revisits the issue and makes an attempt to build on the earlier studies by making use of quantile regression and instrumental variable quantile regression methods. The paper finds that endogeneity problem leads to underestimation of the returns to schooling and the returns tend to vary along the wage distribution, which mean regression models fail to capture. The analysis shows that average returns to schooling for female is higher than that of male. The analysis also shows that returns to schooling tends to be higher as one moves along higher percentiles of wage distribution and this is true for both male and female.

• Item Type: MPRA Paper
• Language: English
• Keywords: Returns to Schooling; Instrumental Variable Regression; Quantile Regression
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C21 - Cross-Sectional Models ; Spatial Models ; Treatment Effect Models ; Quantile Regressions; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C26 - Instrumental Variables (IV) Estimation; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I26 - Returns to Education; J - Labor and Demographic Economics > J0 - General > J01 - Labor Economics: General

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