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Interpreting the Sustainable Development of Human Capital and the Sheepskin Effects in Returns to Higher Education: Empirical Evidence from Pakistan

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  • Zhimin Liu

    (College of Public Administration, Nanjing Agricultural University, Nanjing 210095, China)

  • Aftab Ahmed Memon

    (College of Public Administration, Nanjing Agricultural University, Nanjing 210095, China)

  • Woubshet Negussie

    (College of Land Management, Nanjing Agricultural University, Nanjing 210095, China)

  • Haile Ketema

    (College of Land Management, Nanjing Agricultural University, Nanjing 210095, China)

Abstract

According to poststructuralists, workers with higher level of education and possession of potential experience are supposed to have higher wages. Yet, there are plausible questions that arise as to what levels of education or work history are needed for the enhancement of wage discrimination. Additionally, the outcomes arising from rehashing years of schooling are worth considering. We used a several methods, employing the administrative Household Integrated Economic Survey (HIES) data from Pakistan without ignoring environmental effects. Our estimated results support the conventional assumptions of linearity of log-wage. First, we found substantial returns for postgraduate diploma holders in both public and private sectors, even after controlling the individual’s heterogeneity. Second, we did notice a significant divergence in return to low-level education (LLE) and job history. Third, rehashing years of education may create suspiciousness regarding the lack of competence. Our results suggest that continuous investment in human capital toward postgraduate diploma may result in higher premiums.

Suggested Citation

  • Zhimin Liu & Aftab Ahmed Memon & Woubshet Negussie & Haile Ketema, 2020. "Interpreting the Sustainable Development of Human Capital and the Sheepskin Effects in Returns to Higher Education: Empirical Evidence from Pakistan," Sustainability, MDPI, vol. 12(6), pages 1-16, March.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:6:p:2393-:d:334248
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