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Education and the Income Differential. An Estimation for Rawalpindi City

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  • KHALIL A. HAMDANI

    (Pakistan Institute of Development Economics)

Abstract

Empirical tests of the human capital hypothesis-that eduCation increases an individual's income-have been undertaken in several countries with favourable results [131. These results show that (1) income differentials between individuals of different educational levels are wide; (2) the differentials establish shortly after the initial years of work and maintain through the duration of the life cycle; (3) the differentials are greater in developing countries than in developed countries; (4) the returns to education, after allowing for educational costs, exceed the returns to physical capital investment in developing countries; (5) the highest returns are to primary education; and (6) private returns exceed social returns. Which, if not all, of these results are true for Pakistan is not known. This paper yields such comparative results through an application of the human capital hypothesis to Rawalpindi City. The data for Rawalpindi are for males and derive from a socio-economic survey conducted by the Pakistan Institute of Development Economics in 1975.

Suggested Citation

  • Khalil A. Hamdani, 1977. "Education and the Income Differential. An Estimation for Rawalpindi City," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 16(2), pages 144-164.
    • Handle: RePEc:pid:journl:v:16:y:1977:i:2:p:144-164
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    Cited by:

    1. Ather Maqsood Ahmed & Ismail Sirageldin, 1993. "Socio-economic Determinants of Labour Mobility in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(2), pages 139-157.
    2. 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.
    3. Zafar Mueen Nasir, 1998. "Determinants of Personal Earnings in Pakistan: Findings from the Labour Force Survey 1993-94," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 37(3), pages 251-274.
    4. Zafar Mueen Nasir & Hina Nazli, 2000. "Education and Earnings in Pakistan," PIDE Research Report 2000:1, Pakistan Institute of Development Economics.
    5. Najam US Saqib, 1998. "A Critical Assessment of Free Public Schooling in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 37(4), pages 955-976.
    6. Zafar Mueen Nasir & Riaz Mahmood, 1998. "Personal Earnings Inequality in Pakistan: Findings from the HIES 1993-94," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 37(4), pages 781-792.
    7. Muhammad Ayoob Sheikh & Zareen Abbassi, 2007. "Educational Approach To Character Building : A Paradigm Shift," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 3(2), pages 3-7.
    8. Madeeha Gohar Qureshi, 2012. "The Gender Differences in School Enrolment and Returns to Education in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 51(3), pages 219-256.
    9. G. M. Arif & Najam US Saqib & G. M. Zahid, 1999. "Poverty, Gender, and Primary School Enrolment in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 38(4), pages 979-992.
    10. Muhammad Ayoob Sheikh & Zareen Abbassi, 2007. "Educational Approach To Character Building : A Paradigm Shift," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 3(2), pages 105-109.
    11. Zafar Mueen Nasir, 2002. "Returns to Human Capital in Pakistan: A Gender Disaggregated Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 41(1), pages 1-28.
    12. Tayyeb Shabbir, 1991. "Sheepskin Effects in the Returns to Education in a Developing Country," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 30(1), pages 1-19.
    13. Monazza Aslam, 2006. "Rates of Return to Education by Gender in Pakistan," Economics Series Working Papers GPRG-WPS-064, University of Oxford, Department of Economics.
    14. Javed Ashraf, 2011. "New Evidence On Rates Of Return To Education In Pakistan," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 5(3), pages 113-120.
    15. Zafar Mueen Nasir, 1999. "Do Private Schools Produce More Productive Workers?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 38(4), pages 937-954.
    16. Khwaja Sarmad & Fazal Husain & G. M. Zahid, 1988. "Investment and Inequality in Pakistan's Education Sector," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 27(4), pages 678-686.

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