Returns to education in Nepal: an analysis of educational attainment, employability and social mobility

ABSTRACT

This study examines the impact of educational attainment on employment and earnings in Nepal. Using the Nepal Labour Force Survey 2017–2018 cycle, we employ an extended earnings function derived from the foundational Mincer equation to estimate returns to education. The results underscore the overall positive impact of education (1.76, 3.73, 7.68 and 11.00% increase in earnings by primary, secondary, bachelor’s and master’s degrees, respectively), which is lower than the average observed in other low– and middle– income countries, except in higher education. The results also indicate persisting disparities for females and disadvantaged groups. The study emphasizes the need for strategic interventions, improved educational infrastructure and inclusive policies to foster equitable opportunities.

KEYWORDS:

• returns to education
• employability
• income inequality
• socio-economic disparities
• Nepal

Acknowledgements

The authors would like to thank two anonymous reviewers and special issue editor, Harry Patrinos for useful comments and support. We are also thankful to William Zemp for his excellent assistance on various aspects of this paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data that support the findings of this study will be available via a contact with Nepal Central Bureau of Statistics with a survey ID number of NPL_2017_LFS_v01_M_ILO_VAR.

Notes

1 Includes people who are contributing to family business or those who do not specify work status.

2 At the time of writing this article.