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Return to Schooling for Public and Private Sector Higher Education Institutions of Khyber Pakhtunkhwa-Pakistan

Author

Listed:
  • Aamir Khan

    (Institute of Development Studies, The University of Agriculture Peshawar, Pakistan.)

  • Himayatullah Khan

    (Institute of Development Studies, The University of Agriculture Peshawar, Pakistan.)

Abstract

Human capital is a widely used concept in labor as well as in economics of education. The study examined return to schooling using data of 653 sample of higher education institutions of Khyber Pakhtunkhwa-Pakistan. The study also focused on estimating return to schooling with and without considering the endogeneity bias in schooling variable and compared the estimated return for public and private sector higher education institutions. Data was collected using well-designed questionnaire and the current study adopts Mincerian earning functions with its modified and extended forms using parental education as an instrument. The study found higher return to schooling for public sector respondents and reported considerable variation in estimated return after considering the endogeneity bias in schooling variable. Using an extended Mincerian earning function, the study found that higher return is associated with highest level of schooling and vice versa. Further investigation needed at micro and macro level along with critical evaluation of other instrumental variables for testing the endogeneity bias of schooling variable.

Suggested Citation

  • Aamir Khan & Himayatullah Khan, 2020. "Return to Schooling for Public and Private Sector Higher Education Institutions of Khyber Pakhtunkhwa-Pakistan," International Journal of Economics and Financial Issues, Econjournals, vol. 10(4), pages 125-131.
    • Handle: RePEc:eco:journ1:2020-04-15
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    References listed on IDEAS

    as
    1. Monazza Aslam & Faisal Bari & Geeta Kingdon, 2012. "Returns to schooling, ability and cognitive skills in Pakistan," Education Economics, Taylor & Francis Journals, vol. 20(2), pages 139-173, May.
    2. Qaisar Abbas & James Foreman-Peck, 2008. "The Mincer Human Capital Model in Pakistan," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 9(2), pages 435-462, September.
    3. Gary S. Becker, 1975. "Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, Second Edition," NBER Books, National Bureau of Economic Research, Inc, number beck75-1.
    4. Abbas, Qaisar & Foreman-Peck, James, 2007. "The Mincer Human Capital Model in Pakistan: Implications for Education Policy," Cardiff Economics Working Papers E2007/24, Cardiff University, Cardiff Business School, Economics Section.
    5. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75(4), pages 352-352.
    6. Nadia Asghar & Muhammad Waqas Chughtai, 2012. "Becker & Mincerian Models of Human Capital for Pakistan: A Case Study of Islamabad," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 8(6), pages 138-145, December.
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    More about this item

    Keywords

    Modified Mincerian earning functions; Endogeneity bias; Instrumental variable; Return to Schooling; Parental education; Pakistan.;
    All these keywords.

    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation

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