Household Rates of Return to Education in Rural Bangladesh: Accounting for Direct Costs, Child Labor, and Option Value

29 Pages Posted: 24 Apr 2007

Multiple version iconThere are 2 versions of this paper

Date Written: September 2006

Abstract

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 education level.

Keywords: Bangladesh, child labor, direct costs, option value, rate of return to education

JEL Classification: I20, J10, J2, N35, O15, R2

Suggested Citation

Shafiq, M. Najeeb, Household Rates of Return to Education in Rural Bangladesh: Accounting for Direct Costs, Child Labor, and Option Value (September 2006). Available at SSRN: https://ssrn.com/abstract=982307 or http://dx.doi.org/10.2139/ssrn.982307

M. Najeeb Shafiq (Contact Author)

University of Pittsburgh ( email )

135 N Bellefield Ave
Pittsburgh, PA 15260
United States

HOME PAGE: http://www.pitt.edu/~mnshafiq

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