IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v9y2021i2p83-d562011.html
   My bibliography  Save this article

What Factors in Nepal Account for the Rural–Urban Discrepancy in Human Capital? Evidence from Household Survey Data

Author

Listed:
  • Satis Devkota

    (Social Science Division, University of Minnesota Morris, Morris, MN 56267, USA)

  • Shankar Ghimire

    (School of Accounting, Finance, Economics, and Decision Sciences, Western Illinois University, Macomb, IL 61455, USA)

  • Mukti Upadhyay

    (Department of Economics, Eastern Illinois University, Charleston, IL 61920, USA)

Abstract

We analyze the factors that determine human capital formation in the rural and urban sectors of Nepal and decompose the intersectoral difference into variables underlying supply and demand for human capital. In particular, we examine the role of access to primary and secondary schools as well as the socioeconomic, demographic, and geographic characteristics of households. Our results are based on Nepal Living Standards Survey data for 2004 and 2011. We find that access to schooling has a significant impact on the level of human capital, especially in rural areas. Our Blinder–Oaxaca decomposition attributes a large portion of the rural–urban gap to socioeconomic and demographic variables. Yet, the results reinforce our claim that an improvement in schooling access and road infrastructure is also necessary, particularly in the vast rural sector of Nepal, if human capital development is to provide a greater contribution to national welfare.

Suggested Citation

  • Satis Devkota & Shankar Ghimire & Mukti Upadhyay, 2021. "What Factors in Nepal Account for the Rural–Urban Discrepancy in Human Capital? Evidence from Household Survey Data," Economies, MDPI, vol. 9(2), pages 1-14, May.
    • Handle: RePEc:gam:jecomi:v:9:y:2021:i:2:p:83-:d:562011
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/9/2/83/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/9/2/83/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. César Calderón & Alberto Chong, 2004. "Volume and Quality of Infrastructure and the Distribution of Income: An Empirical Investigation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(1), pages 87-106, March.
    2. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
    3. Randall Akee & William Copeland & E. Jane Costello & Emilia Simeonova, 2018. "How Does Household Income Affect Child Personality Traits and Behaviors?," American Economic Review, American Economic Association, vol. 108(3), pages 775-827, March.
    4. Almond, Douglas & Currie, Janet, 2011. "Human Capital Development before Age Five," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 15, pages 1315-1486, Elsevier.
    5. Nehru, Vikram & Swanson, Eric & Dubey, Ashutosh, 1993. "A new database on human capital stock : sources, methodology and results," Policy Research Working Paper Series 1124, The World Bank.
    6. Janet Currie, 2009. "Healthy, Wealthy, and Wise: Socioeconomic Status, Poor Health in Childhood, and Human Capital Development," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 87-122, March.
    7. Ben Jann, 2008. "The Blinder–Oaxaca decomposition for linear regression models," Stata Journal, StataCorp LP, vol. 8(4), pages 453-479, December.
    8. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    9. Chattopadhyay, Saumen, 2012. "Education and Economics: Disciplinary Evolution and Policy Discourse," OUP Catalogue, Oxford University Press, number 9780198082255.
    10. Handa, Sudhanshu, 2002. "Raising primary school enrolment in developing countries: The relative importance of supply and demand," Journal of Development Economics, Elsevier, vol. 69(1), pages 103-128, October.
    11. Carlos Gradin, 2015. "Poverty and Ethnicity among Black South Africans," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 27(5), pages 921-942, December.
    12. Eric D. Gould & Omer Moav, 2016. "Does High Inequality Attract High Skilled Immigrants?," Economic Journal, Royal Economic Society, vol. 126(593), pages 1055-1091, June.
    13. Ludger Wößmann, 2003. "Specifying Human Capital," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 239-270, July.
    14. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    15. John Gilbert & Nilanjan Banik, 2012. "Socio-economic impacts of regional transport infrastructure in South Asia," Chapters, in: Biswa Nath Bhattacharyay & Masahiro Kawai & Rajat M. Nag (ed.), Infrastructure for Asian Connectivity, chapter 5, pages 139-163, Edward Elgar Publishing.
    16. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
    17. Mejia, Daniel & St-Pierre, Marc, 2008. "Unequal opportunities and human capital formation," Journal of Development Economics, Elsevier, vol. 86(2), pages 395-413, June.
    18. repec:bla:revinw:v:25:y:1979:i:2:p:209-24 is not listed on IDEAS
    19. Cunha, Flavio & Heckman, James J. & Lochner, Lance, 2006. "Interpreting the Evidence on Life Cycle Skill Formation," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 1, chapter 12, pages 697-812, Elsevier.
    20. Sapkota, Jeet Bahadur, 2014. "Access to Infrastructure and Human Development:Cross-Country Evidence," Working Papers 70, JICA Research Institute.
    21. Jacoby, Hanan C, 2000. "Access to Markets and the Benefits of Rural Roads," Economic Journal, Royal Economic Society, vol. 110(465), pages 713-737, July.
    22. John W. Graham & Roy H. Webb, 1979. "Stocks And Depreciation Of Human Capital: New Evidence From A Present‐Value Perspective," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 25(2), pages 209-224, June.
    23. Cynthia Bansak & Brian Chezum, 2009. "How Do Remittances Affect Human Capital Formation of School-Age Boys and Girls?," American Economic Review, American Economic Association, vol. 99(2), pages 145-148, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Deborah A. Cobb-Clark & Julie Moschion, 2017. "Gender gaps in early educational achievement," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(4), pages 1093-1134, October.
    2. Juan F. Castro, 2015. "Linear decompositions of cognitive achievement gaps a cautionary note and an illustration using peruvian data," Working Papers 15-08, Centro de Investigación, Universidad del Pacífico.
    3. Huong Thu Le & Ha Trong Nguyen, 2018. "The evolution of the gender test score gap through seventh grade: new insights from Australia using unconditional quantile regression and decomposition," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-42, December.
    4. Niels-Hugo Blunch & Maitreyi Bordia Das, 2015. "Changing norms about gender inequality in education: Evidence from Bangladesh," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 32(6), pages 183-218.
    5. Karki Nepal, Apsara, 2018. "What matters more for child health: A father’s education or mother’s education?," World Development Perspectives, Elsevier, vol. 10, pages 24-33.
    6. Nguyen, Ha, 2015. "The evolution of the gender test score gap through seventh grade: New insights from Australia using quantile regression and decomposition," MPRA Paper 67586, University Library of Munich, Germany.
    7. Castro, Juan F. & Rolleston, Caine, 2018. "The contribution of early childhood and schools to cognitive gaps: New evidence from Peru," Economics of Education Review, Elsevier, vol. 64(C), pages 144-164.
    8. Eriksson, Tor & Pan, Jay & Qin, Xuezheng, 2014. "The intergenerational inequality of health in China," China Economic Review, Elsevier, vol. 31(C), pages 392-409.
    9. Robert Kaestner & Kevin Callison, 2011. "Adolescent Cognitive and Noncognitive Correlates of Adult Health," Journal of Human Capital, University of Chicago Press, vol. 5(1), pages 29-69.
    10. Tymon Słoczyński, 2015. "The Oaxaca–Blinder Unexplained Component as a Treatment Effects Estimator," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 77(4), pages 588-604, August.
    11. Bachmann, Ronald & Martinez Flores, Fernanda & Rulff, Christian, 2022. "Die Lohnlücke in der Zeitarbeit: Eine empirische Analyse auf Grundlage von BA-Daten und der Verdienststrukturerhebung," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 262219.
    12. Sánchez-Jabba, Andrés Mauricio, 2014. "Etnia y rendimiento académico en Colombia," Chapters, in: Sánchez Jabba, Andrés & Otero Cortés, Andrea (ed.), Educación y desarrollo regional en Colombia, chapter 2, pages 59-100, Banco de la Republica de Colombia.
    13. Vassilis Monastiriotis & Angelo Martelli, 2021. "Crisis, Adjustment and Resilience in the Greek Labor Market: An Unemployment Decomposition Approach," International Regional Science Review, , vol. 44(1), pages 85-112, January.
    14. Brandon Vick, 2017. "Measuring links between labor monopsony and the gender pay gap in Brazil," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-28, December.
    15. Powers, Daniel A. & Yun, Myeong-Su, 2009. "Multivariate Decomposition for Hazard Rate Models," IZA Discussion Papers 3971, Institute of Labor Economics (IZA).
    16. Bryan, Mark & Bryce, Andrew & Rice, Nigel & Roberts, Jennifer & Sechel, Cristina, 2022. "Exploring mental health disability gaps in the labour market: the UK experience during COVID-19," Labour Economics, Elsevier, vol. 78(C).
    17. Bachmann, Ronald & Martinez Flores, Fernanda & Rulf, Christian, 2022. "Die Lohnlücke in der Zeitarbeit: Eine empirische Analyse auf Grundlage der Integrierten Erwerbsbiografien und der Verdienststrukturerhebung," RWI Materialien 153, RWI - Leibniz-Institut für Wirtschaftsforschung.
    18. Borau, Sylvie & Couprie, Hélène & Hopfensitz, Astrid, 2022. "The prosociality of married people: Evidence from a large multinational sample," Journal of Economic Psychology, Elsevier, vol. 92(C).
    19. Norbert Schady & Jere Behrman & Maria Caridad Araujo & Rodrigo Azuero & Raquel Bernal & David Bravo & Florencia Lopez-Boo & Karen Macours & Daniela Marshall & Christina Paxson & Renos Vakis, 2015. "Wealth Gradients in Early Childhood Cognitive Development in Five Latin American Countries," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 446-463.
    20. Martin Gaechter & Peter Schwazer & Engelbert Theurl, 2012. "Stronger Sex but Earlier Death: A Multi-level Socioeconomic Analysis of Gender Differences in Mortality in Austria," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 1, pages 1-23, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:9:y:2021:i:2:p:83-:d:562011. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.