Changes in returns to education in India, 1983-94: by gender, age-cohort and location

There is hardly any estimate of the monetary returns to schooling in the labor market in India based on national level representative data for the recent period. This paper provides estimates of the returns to education in wage employment in India by gender. age cohort and location (rural-urban) for the most recent period 1993/4, and also evaluates the changes in returns over a period of time from 1983-94 using data from a large national level household survey. The estimates show that the returns to education increase up to the secondary level and decline thereafter. There is evidence of substantial gender and rural-urban differences in the returns to schooling. Investment in women's education, particularly at the middle, lower secondary and higher secondary levels, is more profitable than that for men in 1983 and also in 1993/4. The returns to women's primary and middle levels of education have declined while those to secondary and college levels have increased during the decade 1983-94. (C) 2002 Elsevier Science Ltd. All rights reserved.