The Returns to endogenous Human Capital in Pakistan's Rural Wage Labour Market

This paper estimates the private returns to human capital in Pakistani rural labor markets. The rich data used permit inclusion of several dimensions of human capital and control for endogeneity resulting from investment in human capital. The results suggest that, without data on determinants of human capital, it would not be possible to disentangle the separate effect of each dimension of human capital on wage differentials nor to distinguish human capital explanations for wage differentials from signaling and credentialist models. With control for endogeneity of human capital and selectivity into wage employment, cognitive achievement, but not schooling attainment separate from cognitive achievement nor long-run health status, affects wage differentials. Coauthors are Jere R. Behrman, David R. Ross, and Richard Sabot. Copyright 1996 by Blackwell Publishing Ltd (This abstract was borrowed from another version of this item.)

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