Professor Mustafizur Rahman, CPD’s Distinguished Fellow and Mr Md. Al-Hasan, Research Associate, CPD, recently published a journal article, “Returns to Schooling in Bangladesh Revisited: An Instrumental Variable Quantile Regression Approach” at Bangladesh Development Studies Journal, Volume 41, Issue 2 by Bangladesh Institute of Development Studies (BIDS). The paper focuses on estimation of returns to schooling in the context of Bangladesh labour market.
The study shows that average returns to schooling for female is higher than that of male. It also shows that returns to schooling tends to be higher as one moves along higher percentiles of wage distribution. This is found to be true both for male and female, as also for rural and urban labour markets.
This paper finds that the endogeneity problem leads to underestimation of the returns to schooling, and that the returns tend to vary along the wage distribution which mean regression models fail to capture.
Existing literature have not addressed the endogeneity problem concerning schooling and ability to earn in Bangladesh.
The study used the Quarterly Labour Force Survey (QLFS) 2015-2016 data of Bangladesh Bureau of Statistics (BBS) for the analysis.
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