Abstract:
This paper examines the trends in marginal rates of return to
various levels of education for paid employees and how rewards for
additional investments at a particular level of education has changed over
time. Although the findings are indicative of increasing returns at different
educational levels (excluding Graduation) over the years, we find no
evidence that additional investments at successive levels bring consistently
higher returns as highlighted by certain previous studies in Pakistan. The
changes in returns at the primary and pre secondary levels have been found
to be miniscule, taking the time span into consideration. The paper has
also examined the returns to education between males and females and
across urban and rural areas in view of the large disparities that exist by
gender and region. Our findings indicate that although the wage structure
may be biased in favour of males, additional investments made in female
education accrue higher returns in comparison to males. Moreover, higher
education is better rewarded in the urban areas whereas medium of
instruction is a significant indicator of earning differentials in the abour
market.
