Household rates of return to education in rural Bangladesh: Accounting for direct costs, child labour, and option value

Type Journal Article - Education Economics
Title Household rates of return to education in rural Bangladesh: Accounting for direct costs, child labour, and option value
Author(s)
Volume 15
Issue 3
Publication (Day/Month/Year) 2007
Page numbers 343-358
URL http://www.pitt.edu/~mnshafiq/M_Najeeb_Shafiq_(University_of_Pittsburgh)/Research_files/Household​RORE Bangladesh (Shafiq EdEcon 07).pdf
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 labour 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.

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