Household Rates of Return to Education in Rural Bangladesh: Accounting for Direct Costs, Child Labor, and Option Value
29 Pages Posted: 24 Apr 2007
Date Written: September 2006
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: Suggested Citation