Household Rates of Return to Education in Rural Bangladesh: Accounting for Direct Costs, Child Labor, and Option Value
Education Economics, Vol. 15, No. 3, pp. 343-358, 2007
Posted: 24 Apr 2007
This study estimates the returns to boys' education for rural Bangladeshi households by accounting for some conventionally neglected items: direct costs of education, foregone child labor earnings, and option value. The estimated returns are 13.5% for primary education, 7.8% for junior-secondary education, 12.9% for higher-secondary education, and 9.7% for higher education; the resulting option value from primary education is 5.3%. These results suggest that there is economic rationale for non-poor rural households to invest in boys' education, especially at the primary level.
Keywords: Bangladesh, child labor, direct costs, option value, rate of return to education
JEL Classification: C35, D19, I29, J13
Suggested Citation: Suggested Citation