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Abstract
In this paper, we pose the question: to what extent is education responsible for the differential labour market outcomes of women and men in urban India? In particular, we investigate the extent to which education contributes to women's observed lower labour force participation and earnings than men, and whether any contribution of education to the gender wage differential is explained by men and women's differential educational endowments or by labour market discrimination. Our findings suggest that women do suffer high levels of wage discrimination in the Indian urban labour market, but that education contributes little to this discrimination: the wage-disadvantage effect of women's lower years of education than men is entirely offset by the wage-advantage effect of women's higher returns to education than men's. The data also indicate that, for both men and women, returns to education rise with education level, confirming the findings of other recent educational rate of return studies in India and elsewhere.